10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-39061

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

(Exact name of registrant as specified in its charter)

Alberta, Canada (State or other jurisdiction of incorporation or organization)	N/A (IRS Employer Identification No.)
7303 30th Street S.E. Calgary, Alberta, Canada (Address of principal executive offices)	T2C 1N6 (Zip code)

(Registrant’s telephone number, including area code): (403) 723-5000

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The registrant had 193,680,944 common shares outstanding as of April 27, 2026.

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

FORM 10-Q

FOR THE QUARTER ENDED March 31, 2026

TABLE OF CONTENTS

	Page
Cautionary Statement Regarding Forward-Looking Statements	ii
PART I – FINANCIAL INFORMATION	4
Item 1. Financial Statements (Unaudited)	4
Interim Condensed Consolidated Balance Sheet	4
Interim Condensed Consolidated Statement of Operations and Comprehensive Loss	5
Interim Condensed Consolidated Statement of Changes in Shareholders’ Equity	7
Interim Condensed Consolidated Statement of Cash Flows	8
Notes to the Unaudited Interim Condensed Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	36
PART II – OTHER INFORMATION	37
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39

i

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (this “Quarterly Report”) are “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and “forward-looking information” within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project,” “outlook,” “may,” “will,” “should,” “would,” “could,” “can,” “continue,” the negatives thereof, variations thereon and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on certain estimates, beliefs, expectations and assumptions made in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that may be appropriate.

Forward-looking statements necessarily involve unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from those contained in, or expressed or implied by such statements. Due to the risks, uncertainties and assumptions inherent in forward-looking information, you should not place undue reliance on forward-looking statements. Factors that could have a material adverse effect on our business, financial condition, results of operations and growth prospects can be found in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) and applicable securities commissions or similar regulatory authorities in Canada on February 25, 2026 (our “Annual Report on Form 10-K”), and in this Quarterly Report under “Part II, Item 1A. Risk Factors.” These factors include, but are not limited to, the following:

•the effects of tariffs or other trade barriers on exports or imports to and from Canada and the U.S., retaliatory measures in response thereto, including potential increases in the cost of our raw materials, our finished goods, and our ability to mitigate such effects and timing thereof;

•general economic and business conditions in the jurisdictions in which we operate, including potential recession risks in North America;

•our ability to successfully implement the Company’s strategic transformation plan to grow DIRTT’s revenue and pipeline and manage profitability;

•our ability to develop our Construction Services channel (previously referred to as Integrated Solutions) and the effects thereof;

•inflation and material fluctuations of commodity prices, including raw materials, and our ability to set prices for our products that satisfactorily adjust for inflation, tariffs, and fluctuations in commodity prices;

•shortages of supplies of certain key components and materials or disruption in supplies due to global events;

•global economic, political and social conditions affecting financial markets, such as the war in Ukraine and the conflict in the Middle East, including Iran;

•volatility of our share price and potentially limited liquidity for U.S. investors due to our common shares being quoted on the “OTCQX”;

•the availability of capital or financing on acceptable terms, or at all, which may impact our liquidity and impair our ability to make investments in the business;

•turnover of our key executives and difficulties in recruiting or retaining key employees;

•our ability to generate sufficient revenue to achieve and sustain profitability and positive cash flows;

•our ability to attract, train and retain qualified hourly labor on a timely basis to increase overall productive capacity in our manufacturing facilities to enable us to capture any rising demand in the construction industry;

•our ability to achieve and manage growth effectively;

•competition in the interior construction industry;

•the voting influence our three largest shareholders are able to exercise over the Company due to their ownership of our common shares;

•competitive behaviors by our co-founders and former executives;

•the condition and changing trends of the overall construction industry;

ii

•our reliance on our network of Construction Partners (as defined herein) for sales, marketing and installation of our solutions;

•our ability to introduce new designs, solutions and technology and gain client and market acceptance;

•defects in our designing and manufacturing software and warranty and product liability claims brought against us;

•the effectiveness of our manufacturing processes and our success in implementing improvements to those processes;

•the effectiveness of certain elements of our administrative systems and the need for investment in those systems;

•our exposure to currency exchange rates, tax rates, interest rates and other fluctuations, including those resulting from changes in laws or administrative practice, or changes in monetary policies;

•legal and regulatory proceedings brought against us;

•infringement on our patents and other intellectual property and our ability to protect and enforce our intellectual property rights, including certain intellectual property rights that are jointly owned with a third party;

•cyber-attacks and other security breaches of our information and technology systems;

•damage to our information technology and software systems;

•our requirements to comply with applicable environmental, health, safety and other similar laws;

•the impact of environmental, social and governance (“ESG”) matters on our business, including potentially incurring additional expenses implementing Canadian, U.S. and other regulations requiring additional disclosures regarding greenhouse gas emissions and/or broader ESG related-factors;

•periodic fluctuations in our results of operations and financial conditions;

•the effect of being governed by the corporate laws of a foreign country, including the difficulty of enforcing civil liabilities against directors and officers residing in a foreign country;

•the availability and treatment of government subsidies (including any current or future requirements to repay or return such subsidies); and

•future mergers, acquisitions, agreements, consolidations or other corporate transactions we may engage in.

These risks are not exhaustive. Because of these risks and other uncertainties, our actual results, performance or achievement, or industry results, may be materially different from the anticipated or estimated results discussed in the forward-looking statements in this Quarterly Report. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the effects of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or expressed or implied by, any forward-looking statements. Our past results of operations are not necessarily indicative of our future results. You should not place undue reliance on any forward-looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. We undertake no obligation to update these forward-looking statements, even though circumstances may change in the future, except as required under applicable securities laws. We qualify all of our forward-looking statements by these cautionary statements.

iii

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

DIRTT Environmental Solutions Ltd.

Interim Condensed Consolidated Balance Sheet

(Unaudited – Stated in thousands of U.S. dollars)

	As at March 31,			As at December 31,
	2026			2025
ASSETS
Current Assets
Cash and cash equivalents		14,999			20,326
Restricted cash		249			249
Trade and accrued receivables, net of expected credit losses of $0.1 million at March 31, 2026 and December 31, 2025		23,813			22,369
Other receivables		723			716
Inventory		14,921			15,757
Prepaids and other current assets		2,504			2,970
Total Current Assets		57,209			62,387
Property, plant and equipment, net		14,196			14,930
Capitalized software, net		2,923			3,009
Operating lease right-of-use assets, net		17,827			18,900
Other assets		3,086			3,278
Total Assets		95,241			102,504
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities		20,999			19,430
Other liabilities		5,639			5,436
Customer deposits and deferred revenue		5,219			3,507
Current portion of long-term debt and accrued interest		12,432			23,159
Current portion of lease liabilities		5,176			5,215
Total Current Liabilities		49,465			56,747
Long-term debt		5,459			220
Long-term lease liabilities		15,869			17,002
Total Liabilities		70,793			73,969
SHAREHOLDERS’ EQUITY
Common shares, unlimited authorized without par value, 193,609,054 issued and outstanding at March 31, 2026 and 191,912,548 issued and outstanding at December 31, 2025		216,519			214,990
Additional paid-in capital		9,752			11,189
Accumulated other comprehensive loss		(17,442	)		(17,065	)
Accumulated deficit		(184,381	)		(180,579	)
Total Shareholders’ Equity		24,448			28,535
Total Liabilities and Shareholders’ Equity		95,241			102,504

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

4

DIRTT Environmental Solutions Ltd.

Interim Condensed Consolidated Statement of Operations

(Unaudited - Stated in thousands of U.S. dollars)

	For the Three Months Ended March 31,
	2026			2025
Product revenue		40,816			40,346
Service revenue		1,616			949
Total revenue		42,432			41,295
Product cost of sales		27,319			26,356
Service cost of sales		2,112			397
Total cost of sales		29,431			26,753
Gross profit		13,001			14,542
Expenses
Sales and marketing		5,031			5,177
General and administrative		5,436			5,480
Operations support		1,615			2,030
Technology and development		941			1,228
Stock-based compensation		875			739
Reorganization		2,367			210
Total operating expenses		16,265			14,864
Operating loss		(3,264	)		(322	)
Interest income		82			262
Gain on extinguishment of convertible debentures		-			7
Foreign exchange gain (loss)		339			(112	)
Interest expense		(350	)		(451	)
		71			(294	)
Net loss before tax		(3,193	)		(616	)
Income taxes
Current and deferred income tax expense		80			45
Net loss after tax		(3,273	)		(661	)
Net loss per share
Net loss per share − basic and diluted		(0.02	)	(0.00)
Weighted average number of shares outstanding (in thousands)
Basic and diluted		192,358			191,580

5

DIRTT Environmental Solutions Ltd.

Interim Condensed Consolidated Statement of Comprehensive Loss

(Unaudited - Stated in thousands of U.S. dollars)

	For the Three Months Ended March 31,
	2026			2025
Net loss after tax for the period		(3,273	)		(661	)
Exchange differences on translation of foreign operations		(377	)		67
Comprehensive loss for the period		(3,650	)		(594	)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

6

DIRTT Environmental Solutions Ltd.

Interim Condensed Consolidated Statement of Changes in Shareholders’ Equity

(Unaudited – Stated in thousands of U.S. dollars, except for share data)

										Accumulated
	Number of						Additional			other						Total
	Common			Common			paid-in			comprehensive			Accumulated			shareholders’
	shares			shares			capital			loss			deficit			equity
As at December 31, 2024		193,605,237			219,023			8,206			(18,541	)		(166,098	)		42,590
Stock-based compensation		-			-			566			-			-			566
Issued on vesting of RSUs		343,455			366			(366	)		-			-			-
Issued for employee share purchase plan		236,834			152			-			-			-			152
Cancelled from Shares NCIB and Share Repurchase (as each defined in Note 9)		(4,439,107	)		(4,880	)		1,368			-			-			(3,512	)
RSUs withheld to settle employee tax obligations		-			-			(1	)		-			-			(1	)
Foreign currency translation adjustment		-			-			-			67			-			67
Net loss for the period		-			-			-			-			(661	)		(661	)
As at March 31, 2025		189,746,419			214,661			9,773			(18,474	)		(166,759	)		39,201
As at December 31, 2025		191,912,548			214,990			11,189			(17,065	)		(180,579	)		28,535
Stock-based compensation		-			-			537			-			-			537
Issued on vesting of RSUs		1,715,613			1,669			(1,669	)		-			-			-
RSUs withheld to settle employee tax obligations		-			-			(401	)		-			(529	)		(930	)
Issued for employee share purchase plan		188,899			94			-			-			-			94
Cancelled from Shares NCIB (as defined in Note 9)		(208,006	)		(234	)		96			-			-			(138	)
Foreign currency translation adjustment		-			-			-			(377	)		-			(377	)
Net loss for the period		-			-			-			-			(3,273	)		(3,273	)
As at March 31, 2026		193,609,054			216,519			9,752			(17,442	)		(184,381	)		24,448

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

7

DIRTT Environmental Solutions Ltd.

Interim Condensed Consolidated Statement of Cash Flows

(Unaudited – Stated in thousands of U.S. dollars)

	For the Three Months Ended March 31,
	2026			2025
Cash flows from operating activities:
Net loss for the period		(3,273	)		(661	)
Adjustments:
Depreciation and amortization		1,427			1,480
Stock-based compensation		875			739
Foreign exchange (gain) loss		(437	)		256
Gain on extinguishment of convertible debt		-			(7	)
Accretion of convertible debentures		61			84
Loss on disposal		-			115
Changes in operating assets and liabilities:
Trade and accrued receivables		(1,508	)		3,293
Other receivables		(21	)		(247	)
Inventory		636			651
Prepaid and other assets, current and long term		601			17
Accounts payable and accrued liabilities		1,430			(1,694	)
Other liabilities		(92	)		-
Customer deposits and deferred revenue		1,723			(371	)
Current portion of long-term debt and accrued interest		(134	)		(10	)
Lease liabilities		(81	)		39
Net cash flows provided by operating activities		1,207			3,684
Cash flows from investing activities:
Purchase of property, plant and equipment, net of accounts     payable changes		(436	)		(298	)
Capitalized software development expenditures		(274	)		(479	)
Other asset expenditures		(21	)		(6	)
Recovery of software development expenditures		-			54
Net cash flows (used in) investing activities		(731	)		(729	)
Cash flows from financing activities:
Common share repurchases		(138	)		(3,512	)
Repayment of long-term debt		(12,065	)		(96	)
Employee tax payments on vesting of RSUs		(401	)		(1	)
Net proceeds received on long-term debt		6,908			-
Net cash flows (used in) financing activities		(5,696	)		(3,609	)
Effect of foreign exchange on cash, cash equivalents and     restricted cash		(107	)		(191	)
Net decrease in cash, cash equivalents and     restricted cash		(5,327	)		(845	)
Cash, cash equivalents and restricted cash, beginning of period		20,575			29,531
Cash, cash equivalents and restricted cash, end of period		15,248			28,686
Supplemental disclosure of cash flow information:
Interest paid		(397	)		(358	)
Income taxes paid		(73	)		(5	)
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within
the consolidated balance sheet.	As at March 31,
	2026			2025
Cash and cash equivalents		14,999			28,443
Restricted cash		249			243
Total cash, cash equivalents and restricted cash		15,248			28,686

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

8

DIRTT Environmental Solutions Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

(Amounts in thousands of U.S. dollars unless otherwise stated)

1. GENERAL INFORMATION

DIRTT Environmental Solutions Ltd. and its subsidiary (“DIRTT”, the “Company”, “we” or “our”) is a leader in industrialized construction. DIRTT’s system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education, and public sector markets, DIRTT’s system provides total design freedom, and greater certainty in cost, schedule, and outcomes.

DIRTT’s proprietary design integration software, ICE® (“ICE” or “ICE software”), translates the vision of architects and designers into a 3D model that also acts as manufacturing information. ICE is also licensed to unrelated companies and construction partners of the Company (“Construction Partners”), including Armstrong World Industries, Inc. (“AWI”), which owns a 50% interest in the rights, title and interests in certain intellectual property rights in a portion of the ICE software that is used by AWI.

DIRTT is incorporated under the laws of the province of Alberta, Canada. Its headquarters is located at 7303 – 30th Street S.E., Calgary, AB, Canada T2C 1N6 and its registered office is located at 4500, 855 – 2nd Street S.W., Calgary, AB, Canada T2P 4K7. DIRTT’s common shares trade on the Toronto Stock Exchange under the symbol “DRT” and on the OTCQX® Best Market (“OTCQX”) under the symbol “DRTTF.”

2. BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements (the “Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, the Financial Statements do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of the Company, the Financial Statements contain all adjustments necessary, consisting of only normal recurring adjustments, for a fair statement of its financial position as of March 31, 2026, and its results of operations and cash flows for the three months ended March 31, 2026 and 2025. The condensed balance sheet at December 31, 2025, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. These Financial Statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2025 and 2024 and for each of the three years in the period ended December 31, 2025 included in the Annual Report on Form 10-K of the Company as filed with the U.S. Securities and Exchange Commission (the “SEC”) and applicable securities commission or similar regulatory authorities in Canada on February 25, 2026 (the “Annual Report on Form 10-K”).

In these Financial Statements, unless otherwise indicated, all dollar amounts are expressed in United States (“U.S.”) dollars. DIRTT’s financial results are consolidated in Canadian dollars, the Company’s functional currency, and the Company has adopted the U.S. dollar as its reporting currency. All references to US$ or $ are to U.S. dollars and references to C$ are to Canadian dollars.

Principles of consolidation

The Financial Statements include the accounts of DIRTT Environmental Solutions Ltd. and its subsidiary. All intercompany balances, income and expenses, unrealized gains and losses, and dividends resulting from intercompany transactions have been eliminated on consolidation.

9

Basis of measurement

These Financial Statements have been prepared on the historical cost convention except for certain financial instruments, assets held for sale and certain components of stock-based compensation that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The Company’s quarterly tax provision is based upon an estimated annual effective tax rate.

Seasonality

Sales of the Company’s products are driven by consumer and industrial demand for interior construction solutions. The timing of customers’ construction projects can be influenced by a number of factors including the prevailing economic climate and weather.

3. ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

On November 5, 2024, the FASB issued Accounting Standards Update No. 2024-03, “Disaggregation of Income Statement Expenses” (“ASU-2024-03”) which requires further disaggregated information on an entity’s types of expenses presented to better understand the components of an entity’s expense captions. The amendments within ASU-2024-03 are effective for annual reporting periods starting December 15, 2026, and interim periods beginning after December 15, 2027, on a prospective basis with an option of retrospective application. The Company is evaluating the impact of the adoption of this standard and expects this to impact the presentation and disclosures of the Consolidated Statement of Operations and Comprehensive (Loss) Income.

On November 27, 2024, the FASB issued Accounting Standards Update No. 2024-04, “Induced Conversions of Convertible Debt Instruments” (“ASU-2024-04”) which requires discussing an entity’s assessment of induced conversion and debt extinguishment of convertible debt instruments. The amendments in ASU-2024-04 are effective for fiscal years beginning after December 15, 2025, on a prospective basis with an option of retrospective application. The Company has adopted this standard and expects minimal impact, as the Company has no existing convertible debt instruments to which this update applies.

On July 30, 2025, the FASB issued Accounting Standards Update No. 2025-05, “Financial Instruments - Credit Losses” (“ASU-2025-05”) which requires additional consideration when estimating the expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The amendments in ASU-2025-05 are effective for fiscal years beginning after December 15, 2025. The Company has adopted this standard and expects minimal impact to the financial statements and disclosures.

On September 18, 2025, the FASB issued Accounting Standards Update No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software” (“ASU-2025-06”) which targets improvements to the accounting for internal-use software. The amendments in ASU-2025-06 are effective for fiscal years beginning after December 15, 2027, on a prospective basis with an option of retrospective application. The Company is evaluating the impact of the adoption of this standard.

On December 8, 2025, the FASB issued Accounting Standards Update No. 2025-11, “Narrow-Scope Improvements to Interim Reporting” (the “ASU-2025-11”) which clarifies the guidance on interim reporting disclosures. The amendments in ASU-2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is evaluating the impact of the adoption of this standard.

Although there are several other new accounting standards issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its Financial Statements.

10

4. REORGANIZATION

Transformation Office

In early 2025, a transformation office was set up, to accelerate the strategic transformation of our business by streamlining the Company’s processes and procedures, supporting the Construction Services channel, and improving productivity across the Company (the “Transformation Office”). We are incurring one-time consultant costs to assist in, advise, and implement our transformation actions, as well as one-time termination benefits as a result of elimination of positions. The program is planned to be completed in 2026.

For the three months ended March 31, 2026 and 2025, the following reorganization costs incurred relate to the above mentioned initiatives:

	For the Three Months Ended March 31,
	2026		2025
Termination benefits		1,404		-
Transformation Office costs		949		-
Rock Hill Facility closure of operations		-		210
Other costs		14		-
Total reorganization costs		2,367		210

Reorganization costs in accounts payable and accrued liabilities at January 1, 2026	2,088
Reorganization expense	2,367
Reorganization costs paid	(1,840	)
Reorganization costs in accounts payable and accrued liabilities at March 31, 2026	2,615

Of the $2.6 million of reorganization costs in accounts payable and accrued liabilities as at March 31, 2026 (December 31, 2025 – $2.1 million), $2.2 million relates to termination benefits (December 31, 2025 – $1.8 million) and $0.4 million relates to other reorganization costs (December 31, 2025 – $0.3 million).

5. TRADE AND ACCRUED RECEIVABLES

Accounts receivable are recorded at the invoiced amount, do not require collateral and typically do not bear interest. The Company estimates an allowance for credit losses using the lifetime expected credit loss at each measurement date, taking into account historical credit loss experience as well as forward-looking information, in order to establish rates for each class of financial receivable with similar risk characteristics. Adjustments to this estimate are recognized in the consolidated statement of operations.

In order to manage and assess our risk, management maintains credit policies that include regular review of credit limits of individual receivables and systematic monitoring of aging of trade receivables and the financial well-being of our customers. At March 31, 2026, approximately 66% of our trade accounts receivable are trade credit insured, relating to accounts receivable from counterparties deemed creditworthy by the insurer and excluding accounts receivable from government entities. In addition, where possible, we collect a 50% deposit on sales, excluding government and certain other clients.

Our trade balances are spread over a broad Construction Partner base, which is geographically dispersed. For the three months ended March 31, 2026, two Construction Partners accounted for greater than 9% of revenue (one Construction Partner accounted for 9% of revenue for the three months ended March 31, 2025).

The Company’s aged receivables were as follows:

	As at
	March 31, 2026			December 31, 2025
Current		21,389			19,894
Overdue		2,501			2,552
		23,890			22,446
Less: expected credit losses		(77	)		(77	)
Trade and accrued receivables, net of expected credit losses		23,813			22,369

11

No adjustment to our expected credit losses of $0.1 million was required for the three months ended March 31, 2026 for our trade receivables. Receivables are generally considered to be past due when over 60 days old, unless there is a separate payment arrangement in place for the collection of the receivable.

6. OTHER LIABILITIES

	As at
	March 31, 2026		December 31, 2025
Warranty provisions (1)		858		863
DSU liability		2,254		1,954
Income taxes payable		253		247
Sublease deposits		112		206
Other provisions and other liabilities		2,162		2,166
Other liabilities		5,639		5,436

(1)The following table presents a reconciliation of the warranty provision balance:

	As at
	March 31, 2026			December 31, 2025
As at January 1,		863			849
Additions to warranty provision		113			619
Payments related to warranties		(118	)		(605	)
		858			863

As previously disclosed, DIRTT Environmental Solutions Inc. received a subpoena for records in relation to an ongoing inquiry by the U.S. Department of Justice into certain projects and services provided by a third party and DIRTT dating back to 2014. The Company is complying with the subpoena and cooperating with the U.S. Department of Justice. There have been ongoing discussions regarding the possible resolution of these matters with the U.S. Department of Justice without admitting or denying liability. Based on the discussions to date, the Company provided $2.0 million as at December 31, 2025 for the cost of a potential settlement of these matters with the U.S. Department of Justice.

7. LONG-TERM DEBT

	Leasing Facilities			Convertible Debentures			BDC Loan			Total Debt
Balance at January 1, 2025		373			21,979			-			22,352
Accretion of issue costs		-			338			-			338
Accrued interest		28			1,384			-			1,412
Interest payments		(28	)		(1,394	)		-			(1,422	)
Principal repayments		(81	)		(314	)		-			(395	)
Gain on extinguishment		-			(24	)		-			(24	)
Exchange differences		17			1,101			-			1,118
Balance at December 31, 2025		309			23,070			-			23,379
Current portion of long-term debt and accrued interest		89			23,070			-			23,159
Long-term debt		220			-			-			220
Balance at January 1, 2026		309			23,070			-			23,379
Issuances		-			-			6,908			6,908
Accretion of issue costs		-			52			9			61
Accrued interest		6			227			30			263
Interest payments		(6	)		(361	)		(30	)		(397	)
Principal repayments		(22	)		(12,043	)		-			(12,065	)
Exchange differences		(4	)		(247	)		(7	)		(258	)
Balance at March 31, 2026		283			10,698			6,910			17,891
Current portion of long-term debt and accrued interest		90			10,698			1,644			12,432
Long-term debt		193			-			5,266			5,459

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Revolving Credit Facility

On February 12, 2021, the Company entered into a loan agreement governing a C$25.0 million senior secured revolving credit facility with the Royal Bank of Canada (“RBC”), as lender (the “RBC Facility”), as disclosed in our Annual Report on Form 10-K. The Company has extended the RBC Facility a number of times since 2023, including on November 4, 2025 (the “Fifth Extended RBC Facility”). The Fifth Extended RBC Facility matures on November 30, 2026 and is subject to the same borrowing base terms as the previous facility with the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points. The Company would have been in default under the Fifth Extended RBC Facility if the January Debentures were not paid in full or refinanced on terms and conditions satisfactory to RBC by January 31, 2026. The January Debentures were paid in full on January 31, 2026.

On February 11, 2026 and in connection with the Loan (as defined herein), the Company amended the Fifth Extended RBC Facility (the “Seventh Amended RBC Facility”) and, together with its subsidiary, entered into priority agreements with RBC and BDC (collectively, the “Priority Agreement”). The Seventh Amended RBC Facility matures on November 30, 2026 and is subject to the same borrowing base terms as the previous facility. The Seventh Amended RBC Facility allows the Company to incur indebtedness to BDC of C$15 million under the Loan and incorporates permitting specific encumbrances to BDC and the Priority Agreement. The Seventh Amended RBC Facility also releases certain mortgage collateral held by RBC.

On March 11, 2026, the Company entered into the Waiver and Eighth Amendment to Loan Agreement (the “Eighth Amended RBC Facility”), which matures on November 30, 2026. The Eighth Amended RBC Facility is subject to the same borrowing base terms stated in the Seventh Amended RBC Facility. The Eighth Amended RBC Facility includes a customary “Restricted Payments” covenant that prohibits us from, among other things, repurchasing our common shares and paying dividends, unless we have satisfied certain conditions (the “Payment Conditions”). The Payment Conditions include conditions that, after giving effect to the relevant Restricted Payment, the Company has a net borrowing availability of C$5.0 million over the preceding 30-day period, and our fixed charge coverage ratio (“FCCR”) be at least 1.10 to 1.00 on a trailing 12-month basis. In February 2026, we and RBC determined that our purchases of our common shares under our NCIB in December 2025 did not comply with the Restricted Payments covenant because our FCCR was below 1.10 to 1.00. The Eighth Amended RBC Facility provided a waiver in connection with the foregoing.

At March 31, 2026, available borrowings under the Eighth Amended RBC Facility are C$14.0 million ($10.1 million) (December 31, 2025 – C$16.3 million ($11.8 million) of available borrowings), calculated in the same manner as the RBC Facility described above, of which no amounts have been drawn. Under the RBC Facility, if the “Net Borrowing Availability” (defined as the borrowing base less any loan advances and letters of credit or guarantee and if undrawn including unrestricted cash), was less than C$3.0 million for at least thirty consecutive calendar days, the Company is subject to a FCCR covenant of 1.10:1 on a trailing twelve-month basis. As at March 31, 2026, the Company is in compliance with its financial covenants.

Leasing Facilities

The Company has a C$5.0 million equipment leasing facility in Canada (the “Canada Leasing Facility”) of which C$4.4 million ($3.2 million) has been drawn and C$4.0 million ($3.0 million) has been repaid. The Canada Leasing Facility has a seven-year term and bears interest at 4.25%.

The Company did not make any draws on the Canada Leasing Facility during the three months ended March 31, 2026 (2025 – $nil). The associated financial liabilities are shown on the consolidated balance sheet in the current portion of long-term debt and accrued interest and long-term debt.

Convertible Debentures

On January 25, 2021, the Company completed a C$35.0 million ($27.5 million) bought-deal financing of convertible unsecured subordinated debentures (the “January Debentures”) with a syndicate of underwriters. On January 29, 2021, the Company issued a further C$5.25 million ($4.1 million) of the January Debentures under the terms of an overallotment option granted to the underwriters. The January Debentures matured and became repayable

13

on January 31, 2026 (the “January Debentures Maturity Date”) and accrued interest at the rate of 6.00% per annum payable semi-annually in arrears on the last day of January and July of each year commencing on July 31, 2021 until the January Debentures Maturity Date. Interest and principal were payable in cash or shares at the option of the Company. The January Debentures were convertible into common shares of DIRTT, at the option of the holder, at any time prior to the close of business on the business day prior to the earlier of the January Debentures Maturity Date and the date specified by the Company for redemption of the January Debentures. Costs of the transaction were approximately C$2.7 million, including the underwriters’ commission. On November 21, 2023, the Company announced that the Board of Directors had approved a rights offering (the “Rights Offering”) to its common shareholders for aggregate gross proceeds of C$30.0 million ($22.4 million). As a result of the Rights Offering, the conversion price of the January Debentures was adjusted to C$4.03 per common share representing a conversion rate of 248.1390 common shares per C$1,000 principal amount. On March 22, 2024, the Company completed the issuer bid in which the Company repurchased for cancellation C$4.7 million ($3.5 million) of the principal balance of the January Debentures, and paid C$0.04 million ($0.03 million) of the interest payable on such January Debentures (“Issuer Bid”). On August 2, 2024, the Company purchased C$18,915,000 principal amount of the January Debentures for cancellation through the Debenture Repurchase. On August 28, 2024, the Company commenced the Debentures normal course issuer bid (the “Debentures NCIB”) which expired on August 27, 2025. On August 26, 2025, the Company announced the renewal of the Debentures NCIB which commenced on August 28, 2025 upon expiry of the Debentures NCIB (the “Renewed Debentures NCIB”) and is expected to terminate on August 27, 2026 for the December Debentures. The Renewed Debentures NCIB terminated on January 31, 2026, with respect to the January Debentures, concurrent with the January Debentures Maturity Date and repayment of the January Debentures. During the three months ended March 31, 2026, the Company repurchased for cancellation C$nil ($nil) principal amount of January Debentures (C$0.03 million ($0.02 million) for the three months ended March 31, 2025 as part of the Debentures NCIB). The January Debentures balance of C$16.6 million ($12.1 million) was paid in full on January 31, 2026.

On December 1, 2021, the Company completed a C$35.0 million ($27.4 million) bought-deal financing of convertible unsecured subordinated debentures (the “December Debentures”, and collectively with the January Debentures, the “Debentures” with a syndicate of underwriters. The December Debentures will mature and be repayable on December 31, 2026 (the “December Debentures Maturity Date”) and accrue interest at the rate of 6.25% per annum payable semi-annually in arrears on the last day of June and December of each year commencing on June 30, 2022 until the December Debentures Maturity Date. Interest and principal are payable in cash or shares at the option of the Company. The December Debentures will be convertible into common shares of DIRTT, at the option of the holder, at any time prior to the close of business on the business day prior to the earlier of the December Debentures Maturity Date and the date specified by the Company for redemption of the December Debentures. Costs of the transaction were approximately C$2.3 million, including the underwriters’ commission. As a result of the Rights Offering, the conversion price of the December Debentures was adjusted to C$3.64 per common share representing a conversion rate of 274.7253 common shares per C$1,000 principal amount. On March 22, 2024, the Company completed the Issuer Bid in which the Company repurchased for cancellation C$5.8 million ($4.3 million) of the principal balance of the December Debentures and paid C$0.08 million ($0.06 million) of the interest payable on such December Debentures. On August 2, 2024, the Company repurchased for cancellation C$13.6 million ($10.1 million) principal amount of December Debentures held by 22NW Fund, L.P. (“22NW”). On August 28, 2024, the Company commenced the Debentures NCIB which expired on August 27, 2025. On August 26, 2025, the Company announced the Renewed Debentures NCIB which commenced on August 28, 2025 upon expiry of the Debentures NCIB. The Renewed Debentures NCIB is expected to terminate on August 27, 2026 with respect to the December Debentures. During the three months ended March 31, 2026, the Company repurchased for cancellation C$0.03 million ($0.02 million) principal amount of the December Debentures, as part of the Renewed Debentures NCIB and (C$0.1 million ($0.1 million) for the three months ended March 31, 2025 as part of the Debentures NCIB. As at March 31, 2026, C$14.8 million ($10.6 million) principal amount of the December Debentures was outstanding.

BDC Loan

On December 11, 2025, the Company entered into a letter agreement (the “Letter”) with the Business Development Bank of Canada (“BDC”), pursuant to which BDC committed to lending the Company up to C$15.0 million (the “Loan”) subject to the satisfaction of certain conditions. The Letter was subsequently amended on January 30, 2026, February 9, 2026 and March 9, 2026 (the “Amended Letter”).

Following the satisfaction of the conditions precedent set forth in the Letter, the Company received an initial

14

disbursement of C$5.5 million on February 13, 2026 and, following satisfaction of certain additional conditions, a second disbursement of C$4.5 million on March 11, 2026. Subject to certain conditions, it is expected that BDC will make a third disbursement of C$5.0 million in the second half of 2026. The Loan accrues interest at a rate equal to BDC’s floating base rate (6.55% per annum) minus 0.75%. Monthly principal repayments of the Loan commence in May 2026 and additional monthly interest payments are due on the last day of each month, beginning on March 31, 2026. The Loan matures on April 30, 2032. Costs of the transaction were approximately C$0.4 million ($0.3 million). As at March 31, 2026, the Company is in compliance with the Loan’s financial covenants.

The obligations of the Company under the Amended Letter are secured by: (a) general security agreements from the Company granting (i) a first-ranking security interest in specific equipment, and (ii) a second priority security interest in all other present and after acquired personal property (excluding consumer goods), subject to certain registered charges; (b) guarantees from DIRTT Environmental Solutions, Inc. for the full amount of the Loan, supported by general security agreements granting (i) a first ranking security interest in specific equipment and (ii) second priority security interest in all other present and after acquired personal property (excluding consumer goods), subject to certain registered charges; (c) various landlord’s waivers of distraint; (d) first mortgage in the principal amount of US$5.0 million on the land and buildings located at 325 North Wells Street, Chicago, IL, USA, and (e) a letter of credit for C$3.5 million for the third disbursement of C$5.0 million.

The proceeds of the Loan, together with cash on hand, were used to refinance the January Debentures.

The following table includes principal maturities of the BDC Loan at March 31, 2026:

	BDC Loan
2026		797
2027		1,196
2028		1,196
2029		1,196
2030		1,196
Thereafter		1,594
Total		7,175

8. STOCK-BASED COMPENSATION

In May 2020, shareholders approved the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan, which was subsequently amended and restated in each of 2023, 2024 and 2025 and is currently called the DIRTT Environmental Solutions Ltd. Third Amended and Restated Long-Term Incentive Plan (as amended and restated, the “LTIP”). Each amendment and restatement was approved by our shareholders. The LTIP replaced the predecessor incentive plans, being the Performance Share Unit Plan (“PSU Plan”) and the Amended and Restated Stock Option Plan (“Stock Option Plan”). No further awards have been or will be granted under either the Stock Option Plan or the PSU Plan following initial approval of the LTIP in May of 2020, but both plans remain in place to govern the terms of any awards that were granted pursuant to such plans.

The LTIP gives the Company the ability to award options, share appreciation rights, restricted share units, deferred share units, restricted shares, dividend equivalent rights, and other share-based awards and cash awards to eligible employees, officers, consultants and directors of the Company and its affiliates. In accordance with the LTIP, the sum of (i) 30,350,000 common shares plus (ii) the number of common shares subject to stock options previously granted under the Stock Option Plan that, following May 22, 2020, expire or are cancelled or terminated without having been exercised in full, have been reserved for issuance under the LTIP. Upon vesting of certain LTIP awards, the Company may withhold shares as a means of meeting DIRTT’s tax withholding requirements in respect of the withholding tax remittances required in respect of award holders. To the extent the fair value of the withheld shares upon vesting exceeds the grant date fair value of the instrument, the excess amount is credited to retained earnings or deficit.

Prior to May of 2023, deferred share units (“DSUs”) were granted to non-employee directors under the Deferred Share Unit Plan for Non-Employee Directors (as amended and restated, the “DSU Plan”) and settleable only in cash.

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As of May 30, 2023, the LTIP provides the Company the ability to settle DSUs in either cash or common shares, while consolidating future share-based awards under a single plan. The terms of the DSU Plan are otherwise materially unchanged as incorporated into the LTIP. Effective May 30, 2023, no new awards have been or will be made under the DSU Plan, but awards previously granted under the DSU Plan will continue to be governed by the DSU Plan. DSUs are settled following cessation of services with the Company.

Stock-based compensation expense

	For the Three Months Ended March 31,
	2026			2025
Equity-settled awards		918			739
Cash-settled awards		(43	)		-
		875			739

The following summarizes RSUs, PRSUs, PSUs (each as defined herein) and DSUs activity during the periods:

	RSU Time-			RSU Performance-
	Based			Based			PSU			DSU
	Number of			Number of			Number of			Number of
	units			units			units			units
Outstanding at December 31, 2024		10,260,791			45,177			1,845,608			4,033,894
Granted		-			-			-			247,277
Vested or settled		(343,455	)		-			-			-
Withheld to settle employee tax obligations		(952	)		-			-			-
Forfeited or expired		(73,235	)		(45,177	)		-			-
Outstanding at March 31, 2025		9,843,149			-			1,845,608			4,281,171
Outstanding at December 31, 2025		8,181,585			-			2,597,608			3,464,988
Granted		-			-			-			258,254
Vested or settled		(1,715,613	)		-			-			-
Withheld to settle employee tax obligations		(1,414,970	)		-			-			-
Forfeited or expired		(180,214	)		-			(922,804	)		-
Outstanding at March 31, 2026		4,870,788			-			1,674,804			3,723,242

Restricted share units (time-based vesting)

Except as noted below, outstanding restricted share units (“RSUs”) that vest based on time have an aggregate time-based vesting period of three years and generally one-third of the RSUs vest every year over a three-year period from the date of grant. The RSUs will be settled following vesting by way of the provision of cash or shares to employees (or a combination thereof), at the discretion of the Company. There were no RSUs granted in the three months ended March 31, 2026 and March 31, 2025, respectively.

Restricted share units (performance-based vesting)

During 2022 and 2021, RSUs were granted to executives with service and performance-based conditions for vesting based on the Company’s share price performance (the “PRSUs”). Based on share price performance since the date of grant, 66.7% of the 2021 PRSUs vested on March 1, 2024, but none of the 2022 PRSUs vested upon completion of the three-year service period. All PRSUs were expired as of March 31, 2025.

Performance share units

During the second quarter of 2023, certain executives were issued a strategic equity grant through performance share units (“PSUs”). The performance period of the PSUs is from January 1, 2023, to December 31, 2026, with a cliff vesting term for December 31, 2026. An aggregate of 2,584,161 PSUs were granted and depending on the level of performance, the PSUs will vest 100%, 160% or 190% up to a maximum of 4,909,907 PSUs. Settlement will be made in the form of shares issued from treasury. The performance measures are a combination of Revenue and Earnings Before Interest, Taxes, Depreciation and Amortization and both targets have to be achieved. As of March 31, 2026, the fair value of these PSUs have been deemed to be $nil based on the likelihood of achieving the targets compared to current results. During the third quarter of 2023 and the first quarter of 2026, 738,553 PSUs and

16

922,804 PSUs, respectively, with a $nil value were forfeited as a result of executive departures and 922,804 PSUs with a $nil value are outstanding at March 31, 2026.

During the fourth quarter of 2025, the Company granted 752,000 PSUs to its chief transformation officer. The performance period is from November 26, 2025 to June 30, 2026 with a cliff vesting date for June 30, 2026. The performance measures relate to success of cost savings targets tied to transformation efforts by the Company. As of March 31, 2026, the PSUs were deemed to have a value of $0.6 million (December 31, 2025 – $0.6 million).

Deferred share units

Granted under the DSU Plan

The fair value of the DSU liability and the corresponding expense is charged to profit or loss at the grant date. Subsequently, at each reporting date between the grant date and settlement date, the fair value of the liability is remeasured with any changes in fair value recognized in profit or loss for the period. DSUs outstanding at March 31, 2026 had a fair value of $0.4 million which is included in other liabilities on the balance sheet (December 31, 2025 – $0.5 million).

Granted under the LTIP

DSUs granted after May 30, 2023 (the “New DSUs”) will be settled by way of the provision of cash or shares (or a combination thereof) to the directors, at the discretion of the Company. The Company intends to settle these DSUs through issuances of common shares. The weighted average fair value of the DSUs granted in the first three months of 2026 and 2025 was C$0.77 ($0.55) and C$1.04 ($0.73), respectively, which was determined using the closing price of the Company’s common shares on the grant date. New DSUs outstanding at March 31, 2026 had a fair value of $1.5 million which is included in other liabilities on the balance sheet (December 31, 2025 – $1.4 million).

Dilutive Instruments

For the three months ended March 31, 2026 and three months ended March 31, 2025, 1.1 million and 6.6 million RSUs, respectively, 2.8 million and 3.0 million New DSUs, respectively, 0.9 million and 1.8 million PSUs, respectively, and 18.1 million and 31.4 million common shares, respectively, which would have been issued if the principal amounts of the December Debentures and the January Debentures were settled in common shares at the quarter-end price were excluded from the diluted weighted average number of common shares, as their effect would have been anti-dilutive to the net loss per share.

9. SHARE REPURCHASES

On December 18, 2024, the Company announced a normal course issuer bid for common shares (the “Shares NCIB”), which commenced on December 20, 2024 and terminated on December 19, 2025, and permitted DIRTT to acquire up to 7,515,233 common shares. All repurchases under the Shares NCIB were made on the open market through the facilities of the Toronto Stock Exchange (the “TSX”) at the market price of common shares at the time of acquisition. Any common shares acquired through the Shares NCIB were immediately cancelled.

On December 18, 2025, the Company announced the renewal of the Shares NCIB which commenced on December 22, 2025 and will terminate on December 21, 2026 (the “Renewed Shares NCIB”). The Renewed Shares NCIB permits DIRTT to acquire up to 9,593,878 of its common shares. All purchases will be made on the open market through the facilities of the TSX at the market price of common shares at the time of the acquisition. Any common shares acquired through the Renewed Shares NCIB will be immediately cancelled.

On February 13, 2025, the Company entered into a share repurchase agreement (the “NGEN Repurchase Agreement”) with NGEN III, LP (“NGEN”), pursuant to which the Company purchased for cancellation 3,920,844 common shares held by NGEN at a purchase price of $0.80 per common share (the “Share Repurchase”). Pursuant to the terms of the NGEN Repurchase Agreement, the purchase price of $0.80 per common share was a 1% discount to the closing price of the common shares on the TSX on January 27, 2025 (converted into U.S. Dollars using the February 13, 2025 closing exchange rate published by the Bank of Canada). Upon completion of the Share Repurchase on February 14, 2025, there were 189,643,903 common shares outstanding. The common shares repurchased under

17

the Share Repurchase count against the maximum number of shares that could be repurchased pursuant to the Shares NCIB, being 7,515,233 shares.

Under the Renewed Shares NCIB, DIRTT acquired and cancelled 208,006 common shares during the three months ended March 31, 2026, under the Shares NCIB (1,860,152 common shares for the year ended December 31, 2025).

The following table summarizes the common shares repurchased and cancelled during the period:

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced programs		Maximum number of shares that may yet be purchased under the program
January 1, 2026 - January 31, 2026		116,253	$	0.64		116,253		9,477,625
February 1, 2026 - February 28, 2026		53,085	$	0.65		53,085		9,424,540
March 1, 2026 - March 31, 2026		38,668	$	0.69		38,668		9,385,872
Total		208,006				208,006		9,385,872

10. REVENUE

In the following table, revenue is disaggregated by performance obligation and timing of revenue recognition. All revenue comes from contracts with customers. See Note 11 for the disaggregation of revenue by geographic region.

	For the Three Months Ended March 31,
	2026		2025
Product		36,306		36,224
Transportation		4,292		3,938
License fees from Construction Partners		218		184
Total product revenue		40,816		40,346
Installation and other services		1,616		949
		42,432		41,295

DIRTT sells its products and services pursuant to fixed-price contracts which generally have a term of one year or less. The transaction price used in determining the amount of revenue to recognize from fixed-price contracts is based upon agreed contractual terms with each customer and is not subject to variability.

	For the Three Months Ended March 31,
	2026		2025
At a point in time		40,598		40,162
Over time		1,834		1,133
		42,432		41,295

Revenue recognized at a point in time represents the majority of the Company’s sales. Revenue is recognized when a customer obtains legal title to the product, which is when ownership of the product is transferred to, or services are delivered to, the customer. Revenue recognized over time includes pre-construction services, license fees, installation and ongoing maintenance contracts with customers and is recorded as performance obligations which are satisfied over the term of the contract.

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Contract Liabilities

	As at
	March 31, 2026		December 31, 2025		December 31, 2024
Customer deposits		4,559		3,474		4,028
Deferred revenue		660		33		-
Contract liabilities		5,219		3,507		4,028

Contract liabilities primarily relate to deposits received from customers and maintenance revenue from license subscriptions. The balance of contract liabilities was higher as at March 31, 2026 compared to December 31, 2025 mainly due to the timing of orders and payments. Contract liabilities as at December 31, 2025 and 2024 totaling $3.5 million and $4.0 million, respectively, were recognized as revenue in the three months ended March 31, 2026 and 2025, respectively.

Sales by Industry

The Company periodically reviews the growth of product and transportation revenue by vertical market to evaluate the success of industry-specific sales initiatives. The nature of products sold to the various industries is consistent and therefore review is focused on sales performance.

	For the Three Months Ended March 31,
	2026		2025
Commercial		24,635		28,098
Healthcare		12,001		7,204
Government		2,624		2,649
Education		1,338		2,211
License fees from Construction Partners		218		184
Total product and transportation revenue		40,816		40,346
Installation and other services		1,616		949
		42,432		41,295

11. SEGMENT REPORTING

The Company has one reportable and operating segment and operates in two principal geographic locations – Canada and the United States. Revenue continues to be derived almost exclusively from projects in North America and predominantly from the United States. The Company’s revenue from operations from external customers, based on location of operations, and information about its non-current assets, is detailed below.

Revenue from external customers

	For the Three Months Ended March 31,
	2026		2025
Canada		5,808		6,878
U.S.		36,624		34,417
		42,432		41,295

Non-current assets

	As at March 31,		As at December 31,
	2026		2025
Canada		24,760		26,013
U.S.		13,272		14,104
		38,032		40,117

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DIRTT has one reportable segment: solutions. The DIRTT solutions segment derives revenues from customers by providing physical products and digital tools through our ICE software to create interior spaces for our customers across the commercial, healthcare, education and government industries. The solutions segment provides digital tools (access to ICE software) and physical products to create modular interior construction spaces for our customers.

DIRTT’s chief operating decision makers are its chief financial officer and chief executive officer. The chief operating decision makers assess performance for the solutions segment and decide how to allocate resources based on gross profit and net income (loss) that also is reported on the Consolidated Statement of Operations and Comprehensive Income (Loss) as consolidated gross profit and net income (loss). The measure of segment assets is reported on the balance sheet as total consolidated assets. The chief operating decision makers use net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the solutions segment or into other parts of the entity, such as to repay long-term debt.

Net income (loss) are used to monitor budget versus actual results. The chief operating decision makers also use net income (loss) in competitive analysis by benchmarking to DIRTT’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.

DIRTT derives revenue primarily in North America and manages the business activities on a consolidated basis. The technology used in the customer arrangements is based on a single software platform that is deployed to, and implemented by, customers in a similar manner.

Segment profit and loss reconciliation to Net loss after tax

	For the Three Months Ended March 31,
	2026			2025
	($ in thousands)
Revenue		42,432			41,295
Operating expenses (1)		16,265			14,864
Operating loss		(3,264	)		(322	)
Other (expenses)/income and (losses)/gains (2)		(9	)		(339	)
Net loss after tax		(3,273	)		(661	)
Reconciliation of profit or loss
Adjustments and reconciling items		-			-
Net loss after tax		(3,273	)		(661	)

(1) Includes Sales and marketing, General and administrative, Operations support, Technology and development, Stock-based compensation, and Reorganization costs.

(2) Includes Tax expenses, non-recurring gains and losses, foreign exchange gains (losses), interest income and interest expenses.

12. INCOME TAXES

As at March 31, 2026, the Company had a valuation allowance of $31.2 million against deferred tax assets as the Company has experienced cumulative losses in recent years (December 31, 2025 – $30.9 million).

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13. COMMITMENTS AND CONTINGENCIES

As at March 31, 2026, the Company had outstanding purchase obligations of approximately $6.8 million related to service commitments, inventory, and property, plant and equipment purchases (December 31, 2025 – $4.0 million). As at March 31, 2026, the Company had undiscounted operating lease liabilities of $26.2 million (December 31, 2025 – $27.8 million).

As previously disclosed, DIRTT Environmental Solutions Inc. received a subpoena for records in relation to an ongoing inquiry by the U.S. Department of Justice into certain projects and services provided by a third party and DIRTT dating back to 2014. The Company is complying with the subpoena and cooperating with the Department of Justice. There have been ongoing discussions regarding the possible resolution of these matters with the Department of Justice without admitting or denying liability. Based on the discussions to date, the Company provided $2.0 million as at December 31, 2025 for the cost of a potential settlement of these matters with the Department of Justice.

14. RELATED PARTY TRANSACTIONS

On August 2, 2024, DIRTT entered into a support and standstill agreement (the “2024 Support Agreement”) with 22NW and WWT Opportunity #1 LLC (“WWT”), DIRTT’s second largest shareholder at the time, which replaced the support and standstill agreement entered into with 22NW on March 22, 2024. Under the 2024 Support Agreement, both 22NW and WWT agreed to certain voting and standstill obligations, including voting in favor of the management director nominees at each of DIRTT’s next two annual general meetings and voting in favor of the ratification of the Company's amended and restated shareholder rights plan. Additionally, each of 22NW and WWT had the right to designate a director nominee at each of DIRTT’s next two annual general meetings, and is subject to certain restrictions with respect to commencing a take-over bid for the Company. The 2024 Support Agreement also permits WWT to acquire up to 4,067,235 additional shares through market purchases (representing approximately 2% of the then issued and outstanding shares), which provides WWT with an opportunity to own the same number of shares as 22NW (being 57,447,988 shares, or approximately 29.8% of the issued and outstanding shares as of the date of the 2024 Support Agreement). The 2024 Support Agreement otherwise prohibits each of 22NW and WWT from acquiring any additional shares. As a result of the share sale by WWT to the 726 Entities on February 13, 2026 as described below, WWT is no longer entitled to its nomination right under the 2024 Support Agreement. Except as amended by the 2026 Support Agreement described below, the 2024 Support Agreement otherwise remains in force.

On February 17, 2026, the Company entered into a support and standstill agreement (the “2026 Support Agreement”) with 22NW, and 726 BF LLC and 726 BC LLC (collectively, the “726 Entities”), which amends the 2024 Support Agreement in respect of certain matters. The 2026 Support Agreement was entered into in connection with the acquisition by the 726 Entities of certain common shares from WWT, as a result of which the 726 Entities own collectively approximately 15.0% of the Company's outstanding common shares. Under the 2026 Support Agreement, each of 22NW and the 726 Entities has the right to designate a director nominee at the Company's annual general meeting to be held in 2026 (the “2026 Meeting”), so long as they respectively own at least the lesser of (i) 10% of the then outstanding common shares, or (ii) 19,174,445 common shares. Under the 2026 Support Agreement, both 22NW and the 726 Entities are subject to certain voting and standstill obligations, including voting in favor of the management director nominees at the 2026 Meeting. Additionally, 22NW and the 726 Entities are each subject to certain restrictions with respect to commencing a take-over bid for the Company. The 2026 Support Agreement otherwise prohibits each of 22NW and the 726 Entities from acquiring any additional common shares and terminates on the date which is 90 days following the 2026 Meeting. Pursuant to the terms of the 2026 Support Agreement, the Company appointed Jeremy Gold, Managing Director, Briger Family Office, to the Board effective February 13, 2026. Mr. Gold is the nominee director for the 726 Entities under the 2026 Support Agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited interim condensed consolidated financial statements and related notes and other financial information appearing in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (this “Quarterly Report”). This discussion contains forward-looking statements reflecting our current expectations and estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the headings “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Quarterly Report.

Summary of Financial Results

DIRTT Environmental Solutions Ltd. and its subsidiary (“DIRTT”, the “Company”, “we” or “our”) is a leader in industrialized construction for interior spaces. DIRTT’s system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education, and public sector markets, DIRTT’s system provides total design freedom, and greater certainty in cost, schedule, and outcomes.

DIRTT’s proprietary design integration software, ICE® (“ICE” or “ICE software”), translates the vision of architects and designers into a 3D model that also acts as manufacturing information. ICE is also licensed to our Construction Partners and certain third parties, including Armstrong World Industries, Inc. (“AWI”) which owns a 50% interest in the rights, title and interests in certain intellectual property rights in a portion of the ICE software that is used by AWI.

Key First Quarter Highlights and Other Recent Developments

•Revenue for the quarter ended March 31, 2026 was $42.4 million, an increase of $1.1 million or 3%, from $41.3 million for the same period of 2025. We entered the first quarter of 2026 with twelve-month forward pipeline 20% higher as compared to January 1, 2025. The first quarter is historically a low revenue quarter due to seasonality.

•Gross profit and gross profit margin for the quarter ended March 31, 2026 were $13.0 million or 30.6% of revenue compared to $14.5 million or 35.2% of revenue for the quarter ended March 31, 2025. Adjusted Gross Profit (see “– Non-GAAP Financial Measures”) for the three months ended March 31, 2026 was $13.9 million, a decrease from $15.5 million Adjusted Gross Profit for the first quarter of 2025. Adjusted Gross Profit Margin (see “– Non-GAAP Financial Measures”) was 32.9% in the first quarter of 2026, a decrease from 37.5% in the comparative period of 2025. Gross profit and Adjusted Gross Profit for the quarter ended March 31, 2026 were negatively impacted by rising aluminum costs, lower margins on installation projects, and tariff costs. We incurred $2.0 million of tariff costs in the first quarter of 2026 compared to $0.6 million tariff mitigation costs in the first quarter of 2025.

•During the first three months of 2025, various tariffs were levied by the U.S. and Canadian governments. We incurred $2.0 million (4.7% of total revenue) in tariffs and costs related to tariff mitigation actions for the three months ended March 31, 2026 compared to $0.6 million tariff mitigation costs incurred in the three months ended March 31, 2025. DIRTT is most impacted by the 50% tariff levied on Canadian aluminum exports to the U.S. which increased from 25% in June 2025. DIRTT is evaluating the impact of tariff announcements issued by the U.S. Government on April 6, 2026.

•During the three months ended March 31, 2026, the Company undertook activities associated with the deployment of its Transformation Office (as defined herein). An aggregate of $2.4 million of associated costs were recognized as reorganization expenses in the three months ended March 31, 2026 primarily related to termination benefits.

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•Net loss after tax and net loss margin for the first quarter of 2026 was $3.3 million and 7.7% of revenue, respectively, compared to $0.7 million net loss after tax and net loss margin of 1.6% for the same period of 2025. The increase in net loss is primarily the result of a $1.5 million decrease in gross profit, a $2.2 million increase in reorganization expenses, offset by a $0.8 million decrease in other operating expenses, and a $0.5 million increase in foreign exchange gain.

•Adjusted EBITDA (see “– Non-GAAP Financial Measures”) for the first quarter of 2026 was $1.4 million, or 3.3% of revenue, a decrease of $0.7 million from $2.1 million, or 5.1% of revenue, for the first quarter of 2025. Lower Adjusted EBITDA was mainly driven by a $1.6 million decrease in Adjusted Gross Profit, offset by the decrease in other operating expenses discussed above.

•Cash on hand decreased by $5.3 million in the first quarter of 2026 to $15.0 million, compared to a $0.8 million decrease in cash in the first quarter of 2025. The decrease in cash in the first quarter of 2026 was driven by $12.1 million in repayment of the principal amount of the Company’s issued and outstanding 6.00% convertible unsecured subordinated debentures (the “January Debentures”) of C$16.6 million ($12.1 million) on January 31, 2026, $0.7 million in capital expenditures, $0.4 million in employee tax payments on vesting of RSUs, offset by $6.9 million net proceeds received on long-term debt through Business Development Bank of Canada (“BDC”), and $1.2 million of net cash flows provided by operating activities,

•On January 5, 2026, the Company announced that it entered into an agreement for an early termination of the lease at its former Rock Hill Facility, effective December 30, 2025.

•On January 12, 2026, the Company announced that Richard Hunter, President and Chief Operating Officer, departed from the Company and Aaron Merkin joined the Company as the Chief Technology Officer, both effective January 12, 2026.

•On February 2, 2026, the Company’s 10-week trial against Falkbuilt Ltd. (“Falkbuilt”), Messrs. Smed and Loberg and several other former DIRTT employees alleging breaches of restrictive covenants, fiduciary duties, employment duties and confidentiality (the “Falkbuilt Litigation”) commenced. DIRTT is pursuing damages and losses it suffered in Canada, the U.S., and abroad in the Court of King’s Bench of Alberta. The trial is in progress and additional dates have been reserved in July 2026,

• On February 11, 2026, in connection with the financing from BDC, the Company entered into a priority agreement with RBC and BDC, and amended the Fifth Extended RBC Facility (as defined herein).

•On February 17, 2026, the Company announced that it had entered into a support and standstill agreement, effective February 13, 2026, (the “2026 Support Agreement”) with 22NW Fund, L.P. (“22NW”), DIRTT’s largest shareholder, and 726 BF LLC and 726 BC LLC (collectively, the “726 Entities”), who collectively own approximately 15% of the Company’s outstanding common shares. Under the 2026 Support Agreement, each of 22NW and the 726 Entities is subject to certain standstill and voting obligations, including voting in favor of the management nominees at the Company’s 2026 annual general meeting (the “2026 Meeting”), and, provided certain minimum shareholdings are maintained, each of 22NW and the 726 Entities has the right to designate a director nominee at the 2026 Meeting. The Support Agreement terminates on the date which is 90 days following the 2026 Meeting.

•On February 17, 2026, the Company also announced that Jeremy Gold, a Managing Director at the Briger Family Office, was appointed to the Board of Directors effective February 13, 2026, under the terms of the 2026 Support Agreement.

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Pipeline

The table below presents our qualified leads and twelve-month forward pipeline as at April 1, 2026, January 1, 2026, and April 1, 2025. We define qualified leads as the quantity of projects being pursued as of the date presented, and define our pipeline as the estimated potential revenue from qualified leads where a client has engaged DIRTT and is assessing DIRTT as a potential provider of prefabricated interior solutions. We believe these metrics are helpful to estimate near-term performance.

As of April 1, 2026, our twelve-month forward pipeline increased by 16% year-over-year and by 1% from January 1, 2026, illustrated in the table below.

	As at
	April 1, 2026		January 1, 2026		% Change			April 1, 2025		% Change
Twelve-Month Forward Pipeline ($ 000s)
Commercial		181,834		183,323		(1	)		163,579		11
Healthcare		59,582		65,962		(10	)		61,171		(3	)
Government		52,795		52,796		(0	)		44,861		18
Education		43,496		30,763		41			21,947		98
		337,707		332,844		1			291,558		16
Leads (#)		1,421		1,457		(2	)		1,490		(5	)

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Price Increases and Impact of Tariffs

Throughout 2025 and into 2026, the U.S. Government proposed and enacted various tariffs, as disclosed in our Annual Report on Form 10-K. As of the date of this report, tariff revisions were announced effective April 6, 2026. We are reviewing the impact of these revisions on our business. Since we released our Annual Report on Form 10-K, conflict in the Middle East, including Iran, has resulted in rising oil and aluminum prices which are compressing our gross margin. In response, we have implemented an 8% freight and 1% aluminum price surcharge. We continue to monitor and mitigate the impact of tariffs and raw material costs through pricing actions, surcharges, and other operational strategies.

On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act. As a result of this ruling, we may be eligible for a refund of certain tariffs previously paid on imported goods. The financial impact of these events is uncertain, as it is unclear to what extent tariff payments will be refunded, what processes will govern such refunds, or if we can fully collect amounts previously paid. We are evaluating the impact of these developments on our business and financial statements. No adjustments have been recorded in the accompanying interim condensed consolidated financial statements as the recoverability and timing of any such refund remains uncertain and we cannot reasonably predict or estimate the financial impact.

Outlook

As we progress further into 2026, DIRTT is building on the momentum engendered in the second half of 2025. While macroeconomic and industry-related headwinds persist - including trade policy-related volatility, uncertainty around project timing, and delayed capital expenditure decisions - their impact on our business has diminished materially as mitigation actions have been implemented and industry participants have adjusted to the revised trade environment.

The tariff response initiated in early 2025 is now fully implemented. What began as a defensive measure has been embedded into our operating model, evolving into a structural advantage and providing manufacturing flexibility on both sides of the border that few competitors in industrialized construction possess.

Our pipeline reflects these improving dynamics. The twelve‑month forward‑looking pipeline is approximately $338 million, representing an increase of 16% compared to the first quarter of 2025. The scheduling delays and suppressed award activity we identified early last year have continued to normalize. We are seeing renewed alignment between partners and clients around defined project schedules, while cancellations and losses remain de minimis – consistent with demand having been deferred rather than foregone.

Construction Services continues to develop as a revenue channel, accounting for approximately $55 million of the pipeline. In contrast to traditional product-led opportunities, Construction Services engagements are typically governed by contractual arrangements that provide greater commercial visibility once awarded and tend to convert to revenue more consistently. As this channel evolves, it supports broader sales coverage and should improve pipeline-to-revenue conversion. These results reflect continued execution of the Company’s transformation initiatives, including operating model-driven process standardization, cost optimization, partner enablement, and enhanced go-to-market coverage. Collectively, these efforts strengthen DIRTT’s ability to convert pipeline into revenue and earnings. As a result, the Company is better positioned to translate demand into execution and profitability than at any point in its recent history.

With ample liquidity, a growing pipeline, improving conversion trends, and a streamlined operating model, DIRTT remains focused on disciplined execution and long-term value creation for shareholders, partners, and employees.

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Non-GAAP Financial Measures

Note Regarding Use of Non-GAAP Financial Measures

Our interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These GAAP financial statements include non-cash charges and other charges and benefits that we believe are unusual or infrequent in nature or that we believe may make comparisons to our prior or future performance difficult.

As a result, we also provide financial information in this Quarterly Report that is not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. Management uses these non-GAAP financial measures in its review and evaluation of the financial performance of the Company. We believe that these non-GAAP financial measures also provide additional insight to investors and securities analysts as supplemental information to our GAAP results and as a basis to compare our financial performance period-over-period and to compare our financial performance with that of other companies. We believe that these non-GAAP financial measures facilitate comparisons of our core operating results from period to period and to other companies by removing the effects of our capital structure (net interest income on cash deposits, interest expense on outstanding debt and debt facilities, or foreign exchange movements), asset base (depreciation and amortization), tax consequences, reorganization expense, unusual or infrequent charges or gains (such as gain on extinguishment of debt), stock-based compensation, and government subsidies. We remove the impact of foreign exchange gain (loss) from Adjusted EBITDA. Foreign exchange gains and losses can vary significantly period-to-period due to the impact of changes in the U.S. and Canadian dollar exchange rates on foreign currency denominated monetary items on the balance sheet and are not reflective of the underlying operations of the Company. In addition, management bases certain forward-looking estimates and budgets on non-GAAP financial measures, primarily Adjusted EBITDA. We have not reconciled forward-looking non-GAAP measures to its corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to non-operating income and expenditures, which are difficult to predict and subject to change.

Depreciation and amortization, stock-based compensation expense, reorganization expense, foreign exchange gains and losses, gain on extinguishment of debt, net interest income on cash deposits, interest expense on outstanding debt and debt facilities, and tax expense are excluded from our non-GAAP financial measures because management considers them to be outside of the Company’s core operating results, even though some of those receipts and expenses may recur, and because management believes that each of these items can distort the trends associated with the Company’s ongoing performance. We believe that excluding these receipts and expenses provides investors and management with greater visibility to the underlying performance of the business operations, enhances consistency and comparativeness with results in prior periods that do not, or future periods that may not, include such items, and facilitates comparison with the results of other companies in our industry.

The following non-GAAP financial measures are presented in this Quarterly Report, and a description of the calculation for each measure is included.

Adjusted Gross Profit	Gross profit before deductions for depreciation and amortization
Adjusted Gross Profit Margin	Adjusted Gross Profit divided by revenue
EBITDA	Net income before interest, taxes, depreciation, and amortization
Adjusted EBITDA	EBITDA adjusted to remove foreign exchange gains or losses; reorganization expenses; stock-based compensation expense; unusual or infrequent charges (such as gain on extinguishment of debt); and any other non-core gains or losses
Adjusted EBITDA Margin	Adjusted EBITDA divided by revenue

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You should carefully evaluate these non-GAAP financial measures, the adjustments included in them, and the reasons we consider them appropriate for analysis supplemental to our GAAP information. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider any of these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. You should also be aware that we may recognize income or incur expenses in the future that are the same as, or similar to, some of the adjustments in these non-GAAP financial measures. Because these non-GAAP financial measures may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Results of Operations

Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025

	For the Three Months Ended March 31,
	2026			2025			% Change
	($ in thousands)
Revenue		42,432			41,295			3
Gross Profit		13,001			14,542			(11	)
Gross Profit Margin		30.6	%		35.2	%
Operating expenses
Sales and marketing		5,031			5,177			(3	)
General and administrative		5,436			5,480			(1	)
Operations support		1,615			2,030			(20	)
Technology and development		941			1,228			(23	)
Stock-based compensation		875			739			18
Reorganization		2,367			210			1,027
Total operating expenses		16,265			14,864			9
Operating loss		(3,264	)		(322	)		914
Operating margin		(7.7	)%		(0.8	)%
Interest income		82			262			(69	)
Gain on extinguishment of convertible debentures		-			7			(100	)
Foreign exchange gain (loss)		339			(112	)		403
Interest expense		(350	)		(451	)		(22	)
		71			(294	)		124
Net loss before tax		(3,193	)		(616	)		418
Current and deferred income tax expense		80			45			78
Net loss after tax		(3,273	)		(661	)		395

Revenue

Revenue mainly reflects sales to our construction partners (“Construction Partners”) for resale to their clients and, in some circumstances, our direct sales to clients. We are investing in our Construction Services channel to grow revenue and increase direct sales to clients where such opportunities are not available to our Construction Partners. Our revenue is generally affected by the timing of when orders are executed, particularly large orders, which can add variability to our financial results and shift revenue between quarters.

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The following table sets forth the contribution to revenue of our DIRTT product and service offerings:

	For the Three Months Ended March 31,
	2026		2025		% Change
	($ in thousands)
Product		36,306		36,224		0
Transportation		4,292		3,938		9
License fees from Construction Partners		218		184		18
Total product revenue		40,816		40,346		1
Installation and other services		1,616		949		70
		42,432		41,295		3

Revenue for the three months ended March 31, 2026 was $42.4 million, an increase of $1.1 million compared to $41.3 million in the comparative period of 2025. The first quarter is our seasonally slowest quarter and was relatively flat compared to the same quarter in the prior year. See “Price Increases and Impact of Tariffs.” for a discussion on pricing increases announced in the quarter.

Installation and other services revenue was $1.6 million for the quarter ended March 31, 2026 compared to $0.9 million in the quarter ended March 31, 2025. Historically, this revenue primarily reflects services performed by our ICE teams for third parties. Except in limited circumstances, historically our Construction Partners, rather than the Company, perform installation services. For the quarter ended March 31, 2026, our Construction Services channel was involved in a higher number of installation projects resulting in a 70% growth in that revenue stream.

Our success is partly dependent on our ability to profitably develop our Construction Partner network to expand our market penetration and ensure best practices are shared across local markets. At March 31, 2026, we had 60 Construction Partners (March 31, 2025: 69; December 31, 2025: 66) servicing multiple locations. We also continue to work on developing our Construction Services team and partnering with our Construction Partner network to drive revenue for DIRTT.

The following tables present our product and transportation revenue by vertical market:

	For the Three Months Ended March 31,
	2026		2025		% Change
	($ in thousands)
Commercial		24,635		28,098		(12	)
Healthcare		12,001		7,204		67
Government		2,624		2,649		(1	)
Education		1,338		2,211		(39	)
License fees from Construction Partners		218		184		18
Total product revenue		40,816		40,346		1
Service revenue		1,616		949		70
		42,432		41,295		3

	For the Three Months Ended March 31,
	2026		2025
	(in %)
Commercial		62		70
Healthcare		29		18
Government		6		7
Education		3		5
Total Product Revenue(1)		100		100

(1) Excludes license fees from Construction Partners.

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Commercial sales decreased by 12% for the first quarter of 2026 from the first quarter of 2025. The quarter ended March 31, 2026 had fewer large commercial projects compared to the quarter ended March 31, 2025. Healthcare revenues increased by 67% in the first quarter of 2026 compared to the same period of 2025, primarily due to the first quarter of 2026 having a larger volume of projects than those in the same period of 2025. Sales in the healthcare sector tend to be larger individual projects and are subject to timing due to a typically longer sales cycle, resulting in variability in sales levels. We have made several investments in new product solutions (such as COVE™ and Applied Headwalls) and additions to the business development team to increase product placement in future healthcare and life science construction projects. Government sales in the first quarter of 2026 decreased by 1% compared to the first quarter of 2025 primarily due to the projects in 2026 having smaller value than those in the same period of 2025. Education sales in the first quarter of 2026 decreased by 39% from the same period of 2025 due to a lower volume of high value projects in 2026 compared to the same period of 2025.

Revenue continues to be derived almost exclusively from projects in North America and predominantly from the U.S. The following table presents our revenue dispersion by geography:

	For the Three Months Ended March 31,
	2026		2025		% Change
	($ in thousands)
Canada		5,808		6,878		(16	)
U.S.		36,624		34,417		6
		42,432		41,295		3

For the three months ended March 31, 2026, 14% of revenue was from Canada, as compared to 17% for the three months ended March 31, 2025. Historically, approximately 10-15% and 85-90% of revenues are derived from sales to Canada and the United States, respectively. We expect the historical split to continue.

Sales and marketing expenses

Sales and marketing expenses decreased by $0.1 million to $5.0 million for the three months ended March 31, 2026, compared to $5.2 million for the three months ended March 31, 2025.

General and administrative expenses

General and administrative expenses were $5.4 million for the three months ended March 31, 2026, a minor decrease from $5.5 million for the three months ended March 31, 2025.

Operations support expenses

Operations support is comprised primarily of project managers, order entry, and other professionals that facilitate the integration of our Construction Partner project execution, our manufacturing operations, and support staff for the operational processes team. Operations support expenses decreased by $0.4 million for the three months ended March 31, 2026 to $1.6 million from $2.0 million for the comparative period of 2025 primarily due to a $0.3 million decrease in salaries and benefits costs.

Technology and development expenses

Technology and development expenses relate to non-capitalizable costs associated with our product and software development teams, and are primarily comprised of salaries and benefits of technical staff. Technology and development expenses decreased $0.3 million to $0.9 million for the three months ended March 31, 2026 compared to $1.2 million for the three months ended March 31, 2025. The decrease is primarily related to a $0.2 million decrease in salaries and benefits costs.

Stock-based compensation

Stock-based compensation expense is dependent on share price in a period for fair value adjustments made on cash-settled deferred share units (“DSUs”) awards and grants, exercises, expirations or forfeitures made on other awards.

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Stock-based compensation expense for the three months ended March 31, 2026 was $0.9 million compared to $0.7 million in the same period of 2025. The increase in expense was largely due to an increase in performance share units (“PSUs”) expense, slightly offset by a decrease in DSU expense in the first quarter of 2026, compared to the first quarter of 2025.

Reorganization

Reorganization expenses for the three months ended March 31, 2026 were $2.4 million, compared to $0.2 million in the three months ended March 31, 2025. Reorganization expenses for the three months ended March 31, 2026, primarily relate to termination benefit costs and consultant costs associated with our transformation plan, as described in Note 4 of our interim condensed consolidated financial statements, while the reorganization costs for the three months ended March 31, 2025 were largely made up of movement of inventory and equipment from the facility at Rock Hill, South Carolina (the “Rock Hill Facility”) for use at the Calgary facility.

Foreign exchange gain (loss)

Foreign exchange loss or gain increased from a loss of $0.1 million for the three months ended March 31, 2025 to a gain of $0.3 million for the same period of 2026. The increase is primarily related to the weakening of the Canadian dollar over the three months ended March 31, 2026.

Interest income

Interest income for the three months ended March 31, 2026 was $0.1 million compared to $0.3 million for the comparative period of 2025. The decreased interest income is due to declining prime rates on the Company’s lower cash equivalents during the three months ended March 31, 2026 compared to the same period of 2025.

Interest expense

Interest expense decreased by $0.1 million from $0.5 million in the quarter ended March 31, 2025 to $0.4 million for the three months ended March 31, 2026. This decrease is largely due to repayment of the 6% January Debentures on January 31, 2026. The BDC loan of C$10 million was advanced during February and March 2026 and bears an interest rate of 5.8% .

Income tax

Income tax expense for the three months ended March 31, 2026 increased to $0.1 million from $0.04 million in the three months ended March 31, 2025. The current tax expense represents the income tax provision after the utilization of non-capital loss carry forwards against current period taxable income. The provision for income taxes comprises U.S. and Canadian federal, state and provincial taxes based on pre-tax income. Despite positive indications of future profitability, including the strength of our pipeline, the Company has determined that it is unlikely that a deferred tax asset will be recognized. Given the history of losses, the Company plans to maintain a valuation allowance against the deferred tax asset. As at March 31, 2026, the Company had a valuation allowance of $31.2 million (December 31, 2025: $30.9 million) against deferred tax assets. The Company plans to continue to evaluate indicators on whether a valuation allowance continues to be needed. As at March 31, 2026, we had C$115.9 million of non-capital loss carry-forwards in Canada and $41.8 million of non-capital loss carry-forwards in the United States. These loss carry-forwards will begin to expire in 2037.

Net loss after tax

Net loss after tax was $3.3 million or $0.02 net loss per common share, basic and diluted, in the three months ended March 31, 2026, a decrease of $2.6 million from net loss after tax of $0.7 million or $0.00 net loss per common share, basic and diluted, for the three months ended March 31, 2025. The increase in net loss is primarily the result of a $2.2 million increase in reorganization expenses, a $1.5 million decrease in gross profit, and a $0.2 million decrease in interest income. The decreases were offset by a $0.8 million decrease in other operating expenses, and a $0.5 million increase in foreign exchange gains.

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Adjusted Gross Profit and Adjusted Gross Profit Margin for the Three months ended March 31, 2026 and 2025

The following table presents a reconciliation for the three months ended March 31, 2026 and 2025 of Adjusted Gross Profit to our gross profit and Adjusted Gross Profit Margin to gross profit margin, which are the most directly comparable GAAP measures for the periods presented:

	For the Three Months Ended March 31,
	2026			2025
	($ in thousands)
Gross profit		13,001			14,542
Gross profit margin		30.6	%		35.2	%
Add: Depreciation and amortization expense		946			957
Adjusted Gross Profit		13,947			15,499
Adjusted Gross Profit Margin		32.9	%		37.5	%

For the quarter ended March 31, 2026, gross profit margin decreased to 30.6% compared to 35.2% for the same period of 2025. Adjusted Gross Profit Margin was 32.9% for the first quarter of 2026, down from 37.5% in the comparative period of 2025. The decrease in Adjusted Gross Profit Margin was primarily attributable to higher aluminum prices, lower margins on higher installation projects, and higher tariff costs. With respect to higher aluminum prices, we have put in place a 1% tariff surcharge on orders placed after March 18, 2026 to help mitigate the impact of rising aluminum prices.

EBITDA and Adjusted EBITDA for the Three months ended March 31, 2026 and 2025

The following table presents a reconciliation for the results for the three months ended March 31, 2026 and 2025 of EBITDA and Adjusted EBITDA to our net (loss) after tax, and of Adjusted EBITDA Margin to net (loss) margin, which are the most directly comparable GAAP measures for the periods presented:

	For the Three Months Ended March 31,
	2026			2025
	($ in thousands)
Net loss after tax for the period		(3,273	)		(661	)
Add back (deduct):
Interest income		(82	)		(262	)
Interest expense		350			451
Income tax expense		80			45
Depreciation and amortization		1,427			1,480
EBITDA		(1,498	)		1,053
Stock-based compensation		875			739
Reorganization expense(2)		2,367			210
Foreign exchange (gain) loss		(339	)		112
Gain on extinguishment of convertible debentures(2)		-			(7	)
Adjusted EBITDA		1,405			2,107
Net Loss Margin(1)		(7.7	)%		(1.6	)%
Adjusted EBITDA Margin		3.3	%		5.1	%

(1) Net (loss) after tax divided by revenue.

(2) Reorganization expenses (refer to Note 4 of the interim condensed consolidated financial statements) and the gain on extinguishment of convertible debentures are not core to our business and are therefore excluded from the Adjusted EBITDA calculation.

For the three months ended March 31, 2026, Adjusted EBITDA decreased by $0.7 million to $1.4 million from $2.1 million and Adjusted EBITDA Margin decreased to 3.3% from 5.1% for the same period of 2025. This decrease is attributed to the $1.6 million decrease in Adjusted Gross Profit (explained above) offset by a decrease in operating expenses (excluding reorganization expense and stock-based compensation) of $0.9 million.

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Liquidity and Capital Resources

As at March 31, 2026, the Company had $15.0 million of cash on hand and C$14.0 million ($10.1 million) of available borrowings, compared to $20.3 million of cash on hand and C$16.3 million ($11.8 million) of available borrowings as at December 31, 2025. Through the first three months of 2026, the Company used $5.3 million of cash primarily for the repayment of $12.1 million outstanding January Debentures, $0.7 million for capital expenditures, $0.4 million for tax payments on vesting restricted share units (“RSUs”), $0.1 million to repurchase common shares and debentures under the Renewed Shares NCIB and Renewed Debentures NCIB (as defined herein), offset by $6.9 million net proceeds received from the BDC loan and $1.2 million of net cash flows provided by operating activities.

We have assessed the Company’s liquidity as at March 31, 2026, taking into account our sales outlook for the next twelve months, our budget, forecast and expected cash outflows, our existing cash balances and available credit facilities. Based upon this analysis, we believe the Company has sufficient liquidity to remain a going concern for at least the next twelve months. We note that the outstanding principal balance of the December Debentures (as defined herein) amounting to C$14.8 million ($10.6 million) as of March 31, 2026 are due on December 31, 2026 and have therefore been classified as current on our balance sheet. We are evaluating whether we will settle or refinance this debt.

On December 11, 2025, the Company entered into a letter agreement (the “Letter”) with BDC, pursuant to which BDC committed to lending the Company up to C$15.0 million (the “Loan”) subject to the satisfaction of certain conditions. The Letter was subsequently amended on January 30, 2026, February 9, 2026 and March 9, 2026. Following the satisfaction of the conditions precedent set forth in the Letter, the Company received an initial disbursement of C$5.5 million on February 13, 2026 and, following satisfaction of certain additional conditions, a secondary disbursement of C$4.5 million on March 11, 2026. Subject to certain conditions, it is expected that BDC will make a third disbursement of C$5.0 million in the second half of 2026.

On November 4, 2025, the Company entered into the Fifth Extended RBC Facility (as defined herein), which matures on November 30, 2026. The Fifth Extended RBC Facility is subject to the same borrowing base terms as the previous facility; with the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points.

On February 11, 2026 and in connection with the Loan, the Company entered into the Seventh Amended RBC Facility and the Priority Agreement (each as defined herein). The Seventh Amended RBC Facility matures on November 30, 2026 and is subject to the same borrowing base terms as the previous facility. The Seventh Amended RBC Facility allows the Company to incur indebtedness to BDC of C$15 million under the Loan and incorporates permitting specific encumbrances to BDC and the Priority Agreement. The Seventh Amended RBC Facility releases certain mortgage collateral held by RBC.

On March 11, 2026, the Company entered into the Waiver and Eighth Amendment to Loan Agreement (the “Eighth Amended RBC Facility”), which matures on November 30, 2026. The Eighth Amended RBC Facility is subject to the same borrowing base terms stated in the Seventh Amended RBC Facility. The Eighth Amended RBC Facility includes a customary “Restricted Payments” covenant that prohibits us from, among other things, repurchasing our common shares and paying dividends, unless we have satisfied certain conditions (the “Payment Conditions”). The Payment Conditions include conditions that, after giving effect to the relevant Restricted Payment, the Company has a net borrowing availability of at least C$5.0 million over the preceding 30-day period, and our fixed charge coverage ratio (“FCCR”) be at least 1.10 to 1.00 on a trailing 12-month basis. In February 2026, we and RBC determined that our purchases of our common shares under our NCIB in December 2025 did not comply with the Restricted Payments covenant because our FCCR was below 1.10 to 1.00. The Eighth Amended RBC Facility provided a waiver in connection with the foregoing.

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To the extent that existing cash and cash equivalents and available facilities are not sufficient to fund future activities, we may seek to raise additional funds through equity or debt financings. If additional funds are raised through the incurrence of indebtedness, such indebtedness may have rights that are senior to holders of our Debentures (as defined herein) and our equity securities or contain instruments that may be dilutive to our existing shareholders. Any additional equity or debt financing may be dilutive to our existing shareholders. While we believe we can access capital markets when needed or under acceptable terms, there can be no assurance that we will be able to do so, particularly in light of recent market conditions.

We note that as of the date of this report, the imposition of trade barriers, including tariffs, quotas, embargoes, safeguards, and customs restrictions between Canada and the U.S. as well as the current conflict in the Middle East, including Iran, may increase the cost or reduce the supply of materials and products available to us, increase shipping times, affect our customers’ construction needs or budgets, affect the demand for our products or our product mix or require us to modify our supply chain organization, manufacturing facilities, or other current business practices, any of which could harm our business, financial condition, and results of operations.

Equity and Debt Issuances and Buyback Programs

During 2025, we continued to execute on various debt and share buyback programs. The Debenture Repurchase, Debentures NCIB, Renewed Debentures NCIB, Shares NCIB, Renewed Shares NCIB, and the Share Repurchase (each as defined herein) were initiated after careful consideration of cash flow, and the Company continues to evaluate uses of cash on hand. As discussed in the “Part II, Item 1A. Risk Factors” section and elsewhere of this Quarterly Report, proposed and implemented tariffs on Canadian exports into the U.S., and vice versa, may have a material impact on future cash flows and liquidity, which the Company will continue to monitor.

In January 2021, we issued the January Debentures for net proceeds after costs of C$37.6 million ($29.5 million). The January Debentures accrued interest at a rate of 6.00% per annum and were convertible into common shares of DIRTT at an exercise price of C$4.65 per common share, or if not converted would mature and be repayable on January 31, 2026. The Company repaid the outstanding principal and interest on the January Debentures on January 31, 2026.

On December 1, 2021, we issued C$35.0 million of convertible unsecured subordinated debentures (the “December Debentures”, and collectively with the January Debentures, the “Debentures”) for net proceeds after costs of C$32.7 million ($25.6 million). The December Debentures accrue interest at a rate of 6.25% per annum and are convertible into common shares of DIRTT at an exercise price of C$4.20 per common share, or if not converted, will mature and be repayable on December 31, 2026. Interest and principal are payable in cash or shares at the option of the Company.

On August 28, 2024, the Company commenced the Debentures normal course issuer bid (the “Debentures NCIB”) which expired on August 27, 2025. Under the Debentures NCIB, DIRTT was permitted to acquire up to C$1,664,200 principal amount of the January Debentures and C$1,558,700 principal amount of the December Debentures. For the three months ended March 31, 2025, C$0.03 million ($0.02 million) and C$0.1 million ($0.1 million) principal amounts of the December Debentures and January Debentures, respectively, had been acquired through the Debentures NCIB. On August 26, 2025, the Company announced the renewal of the Debentures NCIB which commenced August 28, 2025 and is expected to terminate on August 27, 2026 for the December Debentures and terminated on January 31, 2026 for the January Debentures, concurrent with the maturity date of the January Debentures (the “Renewed Debentures NCIB”). Under the Renewed Debentures NCIB, DIRTT was permitted to acquire up to C$1,656,900 principal amount of the January Debentures and is permitted to acquire C$1,493,500 principal amount of the December Debentures. For the three months ended March 31, 2026, C$0.03 million ($0.02 million) principal amounts of the December Debentures and $nil principal amounts of the January Debentures had been acquired through the Renewed Debentures NCIB. As at March 31, 2026, C$14.8 million ($10.6 million) principal amount of the December Debentures are outstanding.

On December 20, 2024, the Company commenced a normal course issuer bid for common shares (the “Shares NCIB”) which terminated on December 19, 2025. Under the Shares NCIB, DIRTT was permitted to acquire up to 7,515,233 common shares. All purchases will be made on the open market at the market price of common shares at the time of acquisition. Any common shares acquired through the Shares NCIB were immediately cancelled. On December 18, 2025, the Company announced the renewal of the Shares NCIB which commenced December 19, 2025,

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and is expected to terminate on December 21, 2026 (the “Renewed Shares NCIB”). Under the Renewed Shares NCIB, DIRTT is permitted to acquire up to 9,593,878 common shares. All purchases will be made on the open market at the market price of common shares at the time of acquisition. Any common shares acquired through the Shares NCIB will be immediately cancelled.

On February 13, 2025, the Company entered a share repurchase agreement with NGEN III, LP (“NGEN”) to purchase for cancellation 3,920,844 common shares held by NGEN (the “NGEN Shares”) at a purchase price of $0.80 per NGEN Share (the “Share Repurchase”). Following the Share Repurchase, there were 189,643,903 common shares outstanding. The NGEN Shares repurchased under the Share Repurchase were counted against the maximum number of shares that may be repurchased pursuant to the Shares NCIB being 7,515,233 shares. As at March 31, 2026, 6,047,480 common shares had been repurchased and cancelled for proceeds of C$6.5 million ($4.6 million) through the Shares NCIB, Renewed Shares NCIB, and the Share Repurchase.

As explained above, initiating the debt and share buybacks was done after careful consideration of cash flow and with consideration to the risk of proposed and implemented tariffs.

Facilities

On February 12, 2021, the Company entered into a loan agreement governing a C$25.0 million senior secured revolving credit facility with the Royal Bank of Canada (“RBC”), as lender (the “RBC Facility”), as disclosed in our Annual Report on Form 10-K. The Company has extended the RBC Facility a number of times since 2023, including on November 4, 2025 (the “Fifth Extended RBC Facility”). The Fifth Extended RBC Facility expires November 30, 2026 and is subject to the same borrowing base terms as the previous facility, with the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points. At March 31, 2026, available borrowings were C$14.0 million ($10.1 million) (December 31, 2025 – C$16.3 million ($11.8 million) of available borrowings), calculated in the same manner as the RBC Facility described above, of which no amounts have been drawn.

On February 11, 2026 and in connection with the Loan, the Company amended the Fifth Extended RBC Facility (the “Seventh Amended RBC Facility”) and entered into a priority agreement with RBC and BDC (the “Priority Agreement”). The Seventh Amended RBC Facility matures on November 30, 2026 and is subject to the same borrowing base terms as the previous facility. The Seventh Amended RBC Facility allows the Company to incur indebtedness to BDC of C$15 million under the Loan and incorporates permitting specific encumbrances to BDC and the Priority Agreement. The Seventh Amended RBC Facility also releases certain mortgage collateral held by RBC.

On March 11, 2026, the Company entered into the Waiver and Eighth Amendment to Loan Agreement (the “Eighth Amended RBC Facility”), which matures on November 30, 2026. The Eighth Amended RBC Facility is subject to the same borrowing base terms stated in the Seventh Amended RBC Facility. The Eighth Amended RBC Facility includes a customary “Restricted Payments” covenant that prohibits us from, among other things, repurchasing our common shares and paying dividends, unless we have satisfied certain conditions (the “Payment Conditions”). The Payment Conditions include conditions that, after giving effect to the relevant Restricted Payment, the Company has a net borrowing availability of at least C$5.0 million over the preceding 30-day period, and our FCCR be at least 1.10 to 1.00 on a trailing 12-month basis. In February 2026, we and RBC determined that our purchases of our common shares under our NCIB in December 2025 did not comply with the Restricted Payments covenant because our FCCR was below 1.10 to 1.00. The Eighth Amended RBC Facility provided a waiver in connection with the foregoing.

The Company has a C$5.0 million equipment leasing facility in Canada (the “Canada Leasing Facility”) of which, as of March 31, 2026, C$4.4 million ($3.2 million) has been drawn and C$4.0 million ($3.0 million) has been repaid. The Canada Leasing Facility has a seven-year term and bears interest at 4.25%. The Company did not make any draws on the Canada Leasing Facility during the quarters ended March 31, 2026 and 2025.

The Eighth Amended RBC Facility is currently secured by substantially all of our real and personal property located in Canada and the United States. The Seventh Amended RBC Facility released certain mortgage collateral held by RBC.

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Analysis of Cash Flow Changes During the Three Months Ended March 31, 2026 and 2025

The following table summarizes our consolidated cash flows for the periods indicated:

	For the Three Months Ended March 31,
	2026			2025
	($ in thousands)
Net cash flows provided by operating activities		1,207			3,684
Net cash flows (used in) investing activities		(731	)		(729	)
Net cash flows (used in) financing activities		(5,696	)		(3,609	)
Effect of foreign exchange on cash, cash equivalents and restricted cash		(107	)		(191	)
Net decrease in cash, cash equivalents and restricted cash		(5,327	)		(845	)
Cash, cash equivalents and restricted cash, beginning of period		20,575			29,531
Cash, cash equivalents and restricted cash, end of period		15,248			28,686

Operating Activities

For the three months ended March 31, 2026, net cash flows provided by operating activities were $1.2 million compared to $3.7 million in the same period of 2025. The decrease in cash flows provided by operations in the first quarter of 2026 is largely due to the $2.2 million increase in reorganization costs.

Investing Activities

We invested $0.7 million in capital expenditures for the three months ended March 31, 2026, compared to $0.8 million for the three months ended March 31, 2025. The capital expenditures in the three months ended March 31, 2026 and the three months ended March 31, 2025 primarily consisted of $0.3 million and $0.5 million on capitalized software, $0.2 million and $0.1 million on manufacturing upgrades, $0.1 million and $0.1 million on leasehold improvements, respectively.

Financing Activities

We used $5.7 million of cash in financing activities for the three months ended March 31, 2026 compared to $3.6 million used in the three months ended March 31, 2025. Net cash flows used in financing activities for the first quarter of 2026 was driven by the full repayment of the outstanding January Debenture of $12.1 million, $0.4 million for tax payments on vesting RSUs, $0.1 million to repurchase common shares and debentures under the Renewed Shares NCIB and Renewed Debentures NCIB, offset by $6.9 million net proceeds received from the BDC loan. Cash used in the three months ended March 31, 2025 was mainly driven by the $3.5 million spent in common share repurchases through the Shares NCIB and the Share Repurchase.

Contractual Obligations

In addition to the contractual obligations disclosed in the “Management’s Discussion and Analysis of Financial Condition and results of Operations - Contractual Obligations” in our Annual Report on Form 10-K, we received gross proceeds of C$10.0 million ($7.2 million) from BDC. .Monthly principal repayments of the Loan commence in May 2026 and additional monthly interest payments are due on the last day of each month, beginning on March 31, 2026. The Loan matures on April 30, 2032. Refer to Note 7 in our condensed consolidated interim financial statements.

Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies during the three months ended March 31, 2026, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K. For information regarding critical accounting policies and estimates, please refer to Item 7 and Item 8 in our Annual Report on Form 10-K. As disclosed in Note 3, “Adoption of New and Revised Accounting Standards” to our interim condensed consolidated financial statements appearing in this Quarterly Report, we have adopted Accounting Standards Update No. 2024-04, “Induced Conversions of Convertible Debt Instruments” (“ASU-2024-04”) which requires discussing an entity’s assessment of induced conversion and debt extinguishment of convertible debt instruments. The Company

35

has adopted this standard and expects minimal impact, as the Company has no existing convertible debt instruments to which this update applies. The Company has also adopted Accounting Standards Update No. 2025-05, “Financial Instruments - Credit Losses” (the “ASU-2025-05”) which requires additional consideration when estimating the expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The Company expects minimal impact to the financial statements and disclosures.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, please refer to Note 3, “Adoption of New and Revised Accounting Standards,” to our condensed consolidated interim financial statements and “–Significant Accounting Policies and Estimates” appearing in this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risk exposures since our disclosures in our Annual Report on Form 10-K. For information regarding our exposure to certain market risks, please refer to Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K. The Company’s cash and cash equivalents are predominantly all with one AA rated financial institution.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is accumulated and communicated to management, including our principal executive officers and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our principal executive officers and principal financial officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026. Based upon their evaluation, our principal executive officers and principal financial officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material developments in the legal proceedings previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 (our “2025 Form 10-K”), except as described below regarding DIRTT’s litigation against Falkbuilt Ltd. (“Falkbuilt”), Messrs. Smed and Loberg, and their associates.

With respect to the DIRTT’s lawsuit against Falkbuilt in Utah, on February 5, 2025, the U.S. District Court for the Northern District of Utah (the “Utah Court”) granted Falkbuilt’s motion to dismiss the case, on the basis of forum non conveniens, ruling that it would not hear DIRTT’s claim in Utah because Canada was more appropriate, and because Canadian law applies to most of DIRTT’s claims. Further the Utah Court found that DIRTT’s Canadian company, DIRTT Environmental Solutions Ltd., owns the trade secrets that were the subject matter of the Utah claim, so whether the theft of those trade secrets occurred in Canada or abroad, they would result in injury to DIRTT Environmental Solutions Ltd. and should be pursued in Canada. The Utah Court, in essence, redirected the determination of those damages from Utah to Canada, being the appropriate forum for the legal dispute. On March 4, 2025, DIRTT filed a motion for reconsideration pursuant to Federal Rules of Civil Procedure, Rule 60(b). The reconsideration requests relief from the Utah Court’s February 5, 2025, Memorandum Decision and Order granting the Defendant’s motion to dismiss for forum non conveniens. On March 19, 2026, the Utah Court denied the Plaintiff’s motion for relief. DIRTT filed a notice of appeal from the February 5, 2025 and March 19, 2026 rulings. The Court has not set a final briefing schedule.

In November 2024, the Alberta Court of King’s Bench scheduled a 10-week trial commencing February 2, 2026 through April 10, 2026, with additional dates reserved in July 2026, for DIRTT’s action against Falkbuilt, Messrs. Smed and Loberg and several other former DIRTT employees alleging breaches of restrictive covenants, fiduciary duties, employment duties and confidentiality. DIRTT is pursuing damages and losses it suffered in Canada, the United States, and abroad in the Court of King’s Bench of Alberta. The Court of King’s Bench will determine whether Falkbuilt, Messrs. Smed and Loberg and others wrongfully caused DIRTT to suffer damages, which could exceed $50,000,000.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors and other cautionary statements described under the heading “Risk Factors” included in our 2025 Form 10-K, which could materially affect our businesses, financial condition, or results of operations. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes the common shares repurchased and cancelled during the period:

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced programs(1)(2)		Maximum number of shares that may yet be purchased under the program(1)(2)
January 1, 2026 - January 31, 2026		116,253	$	0.64		116,253		9,477,625
February 1, 2026 - February 28, 2026		53,085	$	0.65		53,085		9,424,540
March 1, 2026 - March 31, 2026		38,668	$	0.69		38,668		9,385,872
Total		208,006				208,006		9,385,872

(1) The Renewed Shares NCIB was announced on December 18, 2025, commenced on December 22, 2025 and will terminate on December 21, 2026,

(2) The maximum number of common shares approved to be purchased under the Renewed Shares NCIB is 9,593,878, of which 9,385,872 remain

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Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

EXHIBIT INDEX

Exhibit No.	Description
3.1	Restated Articles of Amalgamation of DIRTT Environmental Solutions Ltd. (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form 10, File No. 001-39061, filed on September 20, 2019).
3.2	Amended and Restated Bylaw No. 1 of DIRTT Environmental Solutions Ltd. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, File No. 001-39061, filed on May 22, 2020).
4.1	Base Indenture, dated January 25, 2021, by and among DIRTT Environmental Solutions Ltd., Computershare Trust Company of Canada and Computershare Trust Company, National Association as Trustees (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, File No. 001-39061, filed on January 29, 2021).
4.2	Supplemental Indenture, dated January 25, 2021, by and among the Company, Computershare Trust Company of Canada and Computershare Trust Company, National Association as Trustees (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, File No. 001-39061, filed on January 29, 2021).
4.3	Second Supplemental Indenture, dated December 1, 2021, by and among the Company, Computershare Trust Company of Canada and Computershare Trust Company, National Association as Trustees (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, File No. 001-39061, filed on December 1, 2021).
10.1*	Waiver and Eighth Amendment to Loan Agreement, dated March 11, 2026, by and among DIRTT Environmental Solutions Ltd., DIRTT Environmental Solutions, Inc. and Royal Bank of Canada.
10.2*	Amendment of Letter of Offer for BDC Loan, dated March 9, 2026, by and among DIRTT Environmental Solutions Ltd., DIRT Environmental Solutions, Inc. and Business development Bank of Canada.
10.3	Support Agreement, dated February 13, 2026, among the Company, 22NW Fund, LP, 726 BF LLC, and 726 BC LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 17, 2026).
31.1*	Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Principal Executive Officer required by 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of the Principal Financial Officer required by 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	Inline XBRL Instance Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*	Filed herewith
**	Furnished herewith

39

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DIRTT ENVIRONMENTAL SOLUTIONS LTD.
	By:	/s/ Fareeha Khan
		Fareeha Khan
		Chief Financial Officer (Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)
Date: May 6, 2026

40

EX-10.1

Exhibit 10.1

Execution Version

WAIVER AND EIGHTH AMENDMENT TO LOAN AGREEMENT

DATED as of March 11, 2026

AMONG: DIRTT ENVIRONMENTAL SOLUTIONS LTD., and DIRTT ENVIRONMENTAL

SOLUTIONS, INC., as Borrowers

AND: ROYAL BANK OF CANADA, as Lender

PREAMBLE

WHEREAS the Borrowers and the Lender entered into that certain Loan Agreement dated as of February 12, 2021 (as amended pursuant to a First Amendment and Consent dated November 15, 2021, the Second Amendment to Loan Agreement dated February 9, 2023, the Third Amendment and Consent to Loan Agreement dated February 9, 2024, the Fourth Amendment to Loan Agreement dated February 12, 2025, the Fifth Amendment to Loan Agreement dated February 20, 2025, the Sixth Amendment to Loan Agreement dated November 4, 2025, the Seventh Amendment and Consent to Loan Agreement dated February 11, 2026 and as may be further amended, restated, supplemented, revised, replaced or otherwise modified from time to time, the “Existing Loan Agreement”);

AND WHEREAS the following Events of Default have occurred and are continuing:

(a)the Credit Parties completed certain purchases of the Canadian Borrower’s Shares during the Fiscal Months ending December 31, 2025 and February 28, 2026, each such purchase constituting a Restricted Payment, and the Payment Conditions were not satisfied at the time of each such purchase due to the Canadian Borrower’s failure to maintain a Fixed Charge Coverage Ratio of 1.10:1.00 on a trailing twelve-month basis, as required pursuant to Section 5.2(h) of the Existing Loan Agreement, resulting in an Event of Default pursuant to Section 7.1(b)(i) of the Existing Loan Agreement (the “Restricted Payment Defaults”); and

(b)following the occurrence of an FCCR Trigger due to the Restricted Payment Defaults, the Canadian Borrower failed to maintain a Fixed Charge Coverage Ratio of 1.10:1.00 on a trailing twelve-month basis during the twelve-month period ending January 31, 2026, as required pursuant to Section 5.1(a) of the Existing Loan Agreement, resulting in an Event of Default pursuant to Section 7.1(b)(i) of the Existing Loan Agreement (the “FCCR Default” and together with the Restricted Payment Defaults, the “Specified Events of Default”).

AND WHEREAS the Borrowers and the Lender have agreed to amend certain provisions of the Loan Agreement, but only to the extent and subject to the limitations set forth in this Waiver and Eighth Amendment to Loan Agreement (this “Amendment” and, together with the Existing Loan Agreement, the “Loan Agreement”) and without prejudice to the Lender’s other rights;

NOW THEREFORE for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereby agree as follows:

ARTICLE I – INTERPRETATION

1.1 All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

1

ARTICLE II – WAIVER

2.1In reliance upon the representations and warranties of each Borrower set forth in Article V below and subject to the satisfaction of the conditions precedent set forth in Article IV below, the Lender hereby waives the Defaults and Events of Default that occur or have occurred solely as a result of the Specified Events of Default. This is a limited waiver and shall be effective only for the Specified Events of Default, and in no event shall this waiver be deemed to be a waiver of any other Defaults or Events of Default now existing or hereafter arising or the enforcement of the Lender’s rights with respect thereto.

ARTICLE III – AMENDMENTS TO THE LOAN AGREEMENT

3.1Schedule A of the Loan Agreement (Definitions) is hereby amended by adding the following definitions in appropriate alphabetical order:

“January 2026 Debenture Repayment” shall mean the repayment of the outstanding Convertible Debentures issued pursuant to a first supplemental indenture dated as of January 25, 2021, in the amount of $17,065,004.27, by the Canadian Borrower on January 29, 2026.

3.2The definition of “Fixed Charges” in Schedule A of the Loan Agreement (Definitions) is hereby deleted in its entirety and replaced with the following (the underlined portions of which show the changes made to such definition):

“Fixed Charges” means, with respect to any Person for any period and on a consolidated basis, the sum of (in each case, without duplication) (i) Total Interest Expense, other thaninterest payments made pursuant to the January 2026 Debenture Repayment, (ii) all Indebtedness repayments required to be paid by such Person during such period, otherthan the January 2026 Debenture Repayment, (iii) all amounts actually paid by such Person in respect of Capital Leases during such period, and (iv) all rent and other charges actually paid by such Person during such period with respect to all operating leases.

3.3Exhibit C to the Loan Agreement (Form of Compliance Certificate) is hereby amended by deleting clause A.(ii) of Attachment 1 to Exhibit C and replacing it with the following (the underlined portions of which show the changes made to such clause):

Total Interest Expense (excluding the January 2026 Debenture Repayment)

scheduled payments of principal on Funded Debt (excluding the January 2026 DebentureRepayment)

scheduled payments under Capital Leases operating lease payments

(ii) TOTAL

ARTICLE IV – CONDITIONS TO EFFECTIVENESS

4.1This Amendment shall become effective upon the Borrowers delivering to the Lender each of the following (such date being referred to herein as the “Effective Date”):

(a)an executed copy of this Amendment by PDF copy transmitted via e-mail or telecopier; and

(b)the Borrowers paying to the Lender an amendment fee equal to $2,500; which fee shall be non-refundable and fully earned and paid upon the execution of this Agreement and

2

which fee may be charged as a Revolving Credit Advance and be added to and form part of a Loan.

ARTICLE V – REPRESENTATIONS AND WARRANTIES

5.1Each Borrower represents and warrants to the Lender that the following statements are true, correct and complete:

(a)Authorization, Validity, and Enforceability of this Amendment. Each Borrower has the corporate power and authority to execute and deliver this Amendment. Each Borrower has taken all necessary corporate action (including, without limitation, obtaining approval of its shareholders if necessary) to authorize the execution and delivery of this Amendment. This Amendment has been duly executed and delivered by the Borrowers and this Amendment constitutes the legal, valid and binding obligations of the Borrowers, enforceable against them in accordance with their respective terms without defence, compensation, setoff or counterclaim. Each Credit Party’s execution and delivery of this Amendment does not and will not conflict with, or constitute a violation or breach of, or constitute a default under, or result in the creation or imposition of any lien upon the property of the Borrowers by reason of the terms of (a) any contract, mortgage, hypothec, lien, lease, agreement, indenture, or instrument to which any of the Borrowers is a party or which is binding on any of them, (b) any requirement of law applicable to the Borrowers, or (c) the certificate or articles of incorporation or amalgamation or bylaws of the Borrowers.

(b)Governmental Authorization. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any governmental authority or other person is necessary or required in connection with the execution, delivery or performance by, or enforcement against the Borrowers or any Subsidiaries of this Amendment except for such as have been obtained or made and filings required in order to perfect and render enforceable the Lender's security interests.

(c)Incorporation of Representations and Warranties From Loan Agreement. The representations and warranties contained in the Loan Agreement are and will be true, correct and complete in all material respects on and as of the Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date.

(d)Absence of Default. Except for the Specified Events of Default that are hereby waived pursuant to Section 2.1 of this Amendment, no event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Amendment that would constitute an Event of Default.

(e)Security. All security delivered to or for the benefit of the Lender pursuant to the Loan Agreement and the other Loan Documents remains in full force and effect and secures all Obligations of the Borrowers under the Loan Agreement and the other Loan Documents to which they are a party.

3

ARTICLE VI – MISCELLANEOUS

6.1Each Borrower (i) reaffirms its Obligations under the Loan Agreement and the other Loan Documents to which it is a party, and (ii) agrees that the Loan Agreement and the other Loan Documents to which it is a party remain in full force and effect, except as amended hereby, and are hereby ratified and confirmed.

6.2The execution, delivery and performance of this Amendment shall not, except as expressly provided for herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Lender under the Loan Agreement or any other document.

6.3Each Borrower acknowledges and agrees that it has read and is fully informed and satisfied with all the terms and conditions of this Amendment and has had the opportunity to obtain independent legal advice in connection therewith.

6.4This Amendment shall be governed by, and construed in accordance with, the internal laws of the Province of Alberta and the federal laws of Canada applicable therein without regard to the principles of conflict of laws.

6.5This Amendment and each other Loan Document may be executed in one or more counterparts (and by different parties hereto in different counterparts), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by fax or other electronic transmission of an executed counterpart of a signature page to this Amendment and each other Loan Document shall be effective as delivery of an original executed counterpart of this Amendment and such other Loan Document. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Amendment or any other Loan Document shall be deemed to include electronic signatures, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, as in provided Parts 2 and 3 of the Personal Information Protection and Electronic Documents Act (Canada), the Electronic Commerce Act, 2000 (Ontario), the Electronic Transaction Acts (British Columbia), the Electronic Transactions Act (Alberta), or any other similar laws based on the Uniform Electronic Commerce Act of the Uniform Law Conference of Canada. The Lender may, in its discretion, require that any such documents and signatures executed electronically or delivered by fax or other electronic transmission be confirmed by a manually-signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature executed electronically or delivered by fax or other electronic transmission.

[The next pages are the signature pages]

4

DATED as of the date first stated above.

Lender: ROYAL BANK OF CANADA,

by its attorneys,

Per: /s/ Dan Mascioli

Name: Dan Mascioli

Title: Sr. Director, Corporate Client Group - Asset Based Lending

Per:

Name:

Title:

Signature Page to Eighth Amendment

Borrower: DIRTT ENVIRONMENTAL SOLUTIONS LTD.

Per: /s/ Fareeha Khan

Name: Fareeha Khan

Title: CFO

Borrower: DIRTT ENVIRONMENTAL SOLUTIONS INC.

Per: /s/ Fareeha Khan

Name: Fareeha Khan

Title: CFO

Signature Page to Eighth Amendment

EX-10.2

Exhibit 10.2

BDCID: 10046495171

March 9, 2026

Ms. Fareeha Khan

Dirtt Environmental Solutions Ltd. 7303 - 30th Street SE

Calgary, AB T2C 1N6

Re: BDC Loan 340411-01

Dear Ms. Khan:

We write in reference to our Letter of Offer for Loan No. 340411-01, and any subsequent amendments thereto. Subject to the terms set out below, the following amendments will be made to your loan.

The amendments shall take effect upon receipt by BDC of the Acceptance Form duly signed by all

signatories no later than May 6, 2026.

Amendments – Loan No. 340411-01:

SECURITY

The following Security is added to this Loan:

1.Landlord's waiver of distraint on the following properties:

a.7303 30th Street SE, Calgary Alberta

b.6335 57th Street SE, Calgary Alberta

c.5620 68th Avenue SE Calgary Alberta

d.155 Knowlton Way, Savannah, Georgia

The following existing Security relating to this Loan: Landlord's waiver of distraint.

is modified and is now replaced with:

Landlord's waiver of distraint from Dream Industrial Twofer (GP) Inc. with respect to 7504-30th Street SE, Calgary, Alberta. Waiver contemplates limited 60-day period to remove collateral from premises following written notice of termination of lease given to BDC by Landlord. Waiver also does not contemplate a cure period or notice of default in favour of BDC, nor a commitment from the landlord to not accept a lease surrender without BDC prior approval or liability for Landlord's failure to provide notice to BDC limited to value of Collateral received by the Landlord in contravention of the Waiver.

Business Development Bank of Canada The Edison, Suite 1310, 150 - 9th Avenue SW Calgary, AB T2P3H9

www.bdc.ca

EN_LOA-FIN_V2.0

If notice of termination is received, BDC must provide the landlord notice of intention to enforce within 30 days. Once BDC has entered the leased premises it will have 5 days to pay the rent for the enforcement period. Such rent amount is to be set out in Landlord’s termination notice.

Except for the modifications expressly mentioned above, nothing in the above amendments with respect to the Security shall in any way alter the rights which BDC now or hereafter has or may have and resulting from the Security nor shall it alter in any way the liability of the remaining obligant(s) and/or guarantor(s), as the case may be.

UNDERLYING CONDITIONS

The following underlying conditions have been added to this Loan:

■Real property leases may not be amended, surrendered, or otherwise terminated without prior written consent of BDC. Any default or termination notices from Landlords, as well as signed copies of all amended, extended, or restated leases, must be provided to BDC at the earliest possible opportunity.

All other terms and conditions of your financing with BDC remain unchanged. Yours truly,

/s/ Cole Godin /s/ Ken Kerr

Cole Godin Ken Kerr

Associate Manager, Corporate Financing Director, Corporate Financing

Phone: [***] Phone: [***]

[***] [***]

Encl.

Page 2 of 3

Business Development Bank of Canada The Edison, Suite 1310

150 - 9th Avenue SW Calgary, AB T2P 3H9

Attention: Cole Godin

Re: BDC Loan 340411-01

The undersigned accept the terms and conditions set forth in BDC’s Letter of Amendment dated March 9, 2026.

Signed this 9th day of March , 2026 .

(date) (month) (year)

BORROWER

Dirtt Environmental Solutions Ltd.

/s/ Fareeha Khan , Authorized Signing Officer

Name:Fareeha Khan

[Please print name of signing party]

GUARANTOR

Dirtt Environmental Solutions, Inc.

/s/ Fareeha Khan , Authorized Signing Officer

Name:Fareeha Khan

[Please print name of signing party]

Page 3 of 3

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO EXCHANGE ACT RULE 13A-14(a) OR RULE 15D-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Benjamin Urban, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of DIRTT Environmental Solutions Ltd. (the “registrant”) for the quarter ended March 31, 2026;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 6, 2026	By:	/s/ Benjamin Urban
		Benjamin Urban
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO EXCHANGE ACT RULE 13A-14(a) OR RULE 15D-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Fareeha Khan, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of DIRTT Environmental Solutions Ltd. (the “registrant”) for the quarter ended March 31, 2026;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 6, 2026	By:	/s/ Fareeha Khan
		Fareeha Khan
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of DIRTT Environmental Solutions Ltd. (the “Company”) for the quarter ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Benjamin Urban, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 6, 2026	By:	/s/ Benjamin Urban
		Benjamin Urban
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of DIRTT Environmental Solutions Ltd. (the “Company”) for the quarter ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Fareeha Khan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 6, 2026	By:	/s/ Fareeha Khan
		Fareeha Khan
		Chief Financial Officer
		(Principal Financial Officer)

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2026	Apr. 27, 2026
Document Cover Page [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2026
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2026
Entity Registrant Name	DIRTT ENVIRONMENTAL SOLUTIONS LTD
Entity Central Index Key	0001340476
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity File Number	001-39061
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	7303 30th Street S.E.
Entity Address, City or Town	Calgary
Entity Address, State or Province	AB
Entity Interactive Data Current	Yes
Entity Address, Postal Zip Code	T2C 1N6
City Area Code	403
Local Phone Number	723-5000
Entity Incorporation, State or Country Code	Z4
Entity Common Stock, Shares Outstanding		193,680,944

XML

Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2026	Dec. 31, 2025
Current Assets
Cash and cash equivalents	$ 14,999	$ 20,326
Restricted cash	249	249
Trade and accrued receivables, net of expected credit losses of $0.1 million at March 31, 2026 and December 31, 2025	23,813	22,369
Other receivables	723	716
Inventory	14,921	15,757
Prepaids and other current assets	2,504	2,970
Total Current Assets	57,209	62,387
Property, plant and equipment, net	14,196	14,930
Capitalized software, net	2,923	3,009
Operating lease right-of-use assets, net	17,827	18,900
Other assets	3,086	3,278
Total Assets	95,241	102,504
Current Liabilities
Accounts payable and accrued liabilities	20,999	19,430
Other liabilities	5,639	5,436
Customer deposits and deferred revenue	5,219	3,507
Current portion of long-term debt and accrued interest	12,432	23,159
Current portion of lease liabilities	5,176	5,215
Total Current Liabilities	49,465	56,747
Long-term debt	5,459	220
Long-term lease liabilities	15,869	17,002
Total Liabilities	70,793	73,969
SHAREHOLDERS’ EQUITY
Common shares, unlimited authorized without par value, 193,609,054 issued and outstanding at March 31, 2026 and 191,912,548 issued and outstanding at December 31, 2025	216,519	214,990
Additional paid-in capital	9,752	11,189
Accumulated other comprehensive loss	(17,442)	(17,065)
Accumulated deficit	(184,381)	(180,579)
Total Shareholders’ Equity	24,448	28,535
Total Liabilities and Shareholders’ Equity	$ 95,241	$ 102,504

XML

Interim Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2026	Dec. 31, 2025
Statement of Financial Position [Abstract]
Trade and other receivables, expected credit losses	$ 77	$ 77
Common shares, authorized	Unlimited	Unlimited
Common shares, no par value	$ 0	$ 0
Common shares, shares issued	193,609,054	191,912,548
Common shares, shares outstanding	193,609,054	191,912,548

XML

Interim Condensed Consolidated Statement of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Total revenue	$ 42,432	$ 41,295
Total cost of sales	29,431	26,753
Gross profit	13,001	14,542
Expenses
Sales and marketing	5,031	5,177
General and administrative	5,436	5,480
Operations support	1,615	2,030
Technology and development	941	1,228
Stock-based compensation	875	739
Reorganization	2,367	210
Total operating expenses	16,265	14,864
Operating loss	(3,264)	(322)
Interest income	82	262
Gain on extinguishment of convertible debentures	0	7
Foreign exchange gain (loss)	339	(112)
Interest expense	(350)	(451)
Nonoperating Income (Expense)	71	(294)
Net loss before tax	(3,193)	(616)
Income taxes
Current and deferred income tax expense	80	45
Net loss after tax	$ (3,273)	$ (661)
Net loss per share
Net loss per share - basic	$ (0.02)	$ (0)
Net loss per share - diluted	$ (0.02)	$ (0)
Weighted average number of shares outstanding (in thousands)
Basic	192,358	191,580
Diluted	192,358	191,580
Product [Member]
Total revenue	$ 40,816	$ 40,346
Total cost of sales	27,319	26,356
Service [Member]
Total revenue	1,616	949
Total cost of sales	$ 2,112	$ 397

XML

Interim Condensed Consolidated Statement of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net Income (Loss)	$ (3,273)	$ (661)
Exchange differences on translation of foreign operations	(377)	67
Comprehensive loss for the period	$ (3,650)	$ (594)

XML

Interim Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Shares	Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit
Beginning Balance at Dec. 31, 2024	$ 42,590	$ 219,023	$ 8,206	$ (18,541)	$ (166,098)
Beginning Balance (in shares) at Dec. 31, 2024		193,605,237
Stock-based compensation	566		566
Issued on vesting of RSUs		$ 366	(366)
Issued on vesting of RSUs (in shares)		343,455
RSUs withheld to settle employee tax obligations	(1)		(1)
Cancelled from Shares NCIB and Share Repurchase (each as defined in Note 9)	(3,512)	$ (4,880)	1,368
Cancelled from Shares NCIB and Share Repurchase (each as defined in Note 9) (in shares)		(4,439,107)
Issued for employee share purchase plan	152	$ 152
Issued for employee share purchase plan (In Shares)		236,834
Foreign currency translation adjustment	67			67
Net Income (Loss)	(661)				(661)
Ending Balance at Mar. 31, 2025	39,201	$ 214,661	9,773	(18,474)	(166,759)
Ending Balance (in shares) at Mar. 31, 2025		189,746,419
Beginning Balance at Dec. 31, 2024	$ 42,590	$ 219,023	8,206	(18,541)	(166,098)
Beginning Balance (in shares) at Dec. 31, 2024		193,605,237
Cancelled from Shares NCIB and Share Repurchase (each as defined in Note 9) (in shares)	1,860,152
Ending Balance at Dec. 31, 2025	$ 28,535	$ 214,990	11,189	(17,065)	(180,579)
Ending Balance (in shares) at Dec. 31, 2025		191,912,548
Stock-based compensation	537		537
Issued on vesting of RSUs		$ 1,669	(1,669)
Issued on vesting of RSUs (in shares)		1,715,613
RSUs withheld to settle employee tax obligations	(930)		(401)		(529)
Cancelled from Shares NCIB and Share Repurchase (each as defined in Note 9)	(138)	$ (234)	96
Cancelled from Shares NCIB and Share Repurchase (each as defined in Note 9) (in shares)		(208,006)
Issued for employee share purchase plan	94	$ 94
Issued for employee share purchase plan (In Shares)		188,899
Foreign currency translation adjustment	(377)			(377)
Net Income (Loss)	(3,273)				(3,273)
Ending Balance at Mar. 31, 2026	$ 24,448	$ 216,519	$ 9,752	$ (17,442)	$ (184,381)
Ending Balance (in shares) at Mar. 31, 2026		193,609,054

XML

Interim Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Cash flows from operating activities:
Net loss for the period	$ (3,273)	$ (661)
Adjustments:
Depreciation and amortization	1,427	1,480
Stock-based compensation	875	739
Foreign exchange (gain) loss	(437)	256
Gain on extinguishment	0	(7)
Accretion of convertible debentures	61	84
Loss on disposal	0	115
Changes in operating assets and liabilities:
Trade and accrued receivables	(1,508)	3,293
Other receivables	(21)	(247)
Inventory	636	651
Prepaid and other assets, current and long term	601	17
Accounts payable and accrued liabilities	1,430	(1,694)
Other liabilities	(92)	0
Customer deposits and deferred revenue	1,723	(371)
Current portion of long-term debt and accrued interest	(134)	(10)
Lease liabilities	(81)	39
Net cash flows provided by operating activities	1,207	3,684
Cash flows from investing activities:
Purchase of property, plant and equipment, net of accounts payable changes	(436)	(298)
Capitalized software development expenditures	(274)	(479)
Other asset expenditures	(21)	(6)
Recovery of software development expenditures	0	54
Net cash flows (used in) investing activities	(731)	(729)
Cash flows from financing activities:
Common share repurchases	(138)	(3,512)
Repayment of long-term debt	(12,065)	(96)
Employee tax payments on vesting of RSUs	(401)	(1)
Net proceeds received on long-term debt	6,908	0
Net cash flows (used in) provided by financing activities	(5,696)	(3,609)
Effect of foreign exchange on cash, cash equivalents and restricted cash	(107)	(191)
Net decrease in cash, cash equivalents and restricted cash	(5,327)	(845)
Cash, cash equivalents and restricted cash, beginning of period	20,575	29,531
Cash, cash equivalents and restricted cash, end of period	15,248	28,686
Supplemental disclosure of cash flow information:
Interest paid	(397)	(358)
Income taxes paid	$ (73)	$ (5)

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Interim Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2026	Mar. 31, 2025
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 14,999	$ 28,443
Restricted cash	249	243
Total cash, cash equivalents and restricted cash	$ 15,248	$ 28,686

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Pay vs Performance Disclosure
Net Income (Loss)	$ (3,273)	$ (661)

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Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2026
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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GENERAL INFORMATION

3 Months Ended

Mar. 31, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL INFORMATION

1. GENERAL INFORMATION

DIRTT Environmental Solutions Ltd. and its subsidiary (“DIRTT”, the “Company”, “we” or “our”) is a leader in industrialized construction. DIRTT’s system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education, and public sector markets, DIRTT’s system provides total design freedom, and greater certainty in cost, schedule, and outcomes.

DIRTT’s proprietary design integration software, ICE® (“ICE” or “ICE software”), translates the vision of architects and designers into a 3D model that also acts as manufacturing information. ICE is also licensed to unrelated companies and construction partners of the Company (“Construction Partners”), including Armstrong World Industries, Inc. (“AWI”), which owns a 50% interest in the rights, title and interests in certain intellectual property rights in a portion of the ICE software that is used by AWI.

DIRTT is incorporated under the laws of the province of Alberta, Canada. Its headquarters is located at 7303 – 30th Street S.E., Calgary, AB, Canada T2C 1N6 and its registered office is located at 4500, 855 – 2nd Street S.W., Calgary, AB, Canada T2P 4K7. DIRTT’s common shares trade on the Toronto Stock Exchange under the symbol “DRT” and on the OTCQX® Best Market (“OTCQX”) under the symbol “DRTTF.”

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

2. BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements (the “Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, the Financial Statements do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of the Company, the Financial Statements contain all adjustments necessary, consisting of only normal recurring adjustments, for a fair statement of its financial position as of March 31, 2026, and its results of operations and cash flows for the three months ended March 31, 2026 and 2025. The condensed balance sheet at December 31, 2025, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. These Financial Statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2025 and 2024 and for each of the three years in the period ended December 31, 2025 included in the Annual Report on Form 10-K of the Company as filed with the U.S. Securities and Exchange Commission (the “SEC”) and applicable securities commission or similar regulatory authorities in Canada on February 25, 2026 (the “Annual Report on Form 10-K”).

In these Financial Statements, unless otherwise indicated, all dollar amounts are expressed in United States (“U.S.”) dollars. DIRTT’s financial results are consolidated in Canadian dollars, the Company’s functional currency, and the Company has adopted the U.S. dollar as its reporting currency. All references to US$ or $ are to U.S. dollars and references to C$ are to Canadian dollars.

Principles of consolidation

The Financial Statements include the accounts of DIRTT Environmental Solutions Ltd. and its subsidiary. All intercompany balances, income and expenses, unrealized gains and losses, and dividends resulting from intercompany transactions have been eliminated on consolidation.

Basis of measurement

These Financial Statements have been prepared on the historical cost convention except for certain financial instruments, assets held for sale and certain components of stock-based compensation that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The Company’s quarterly tax provision is based upon an estimated annual effective tax rate.

Seasonality

Sales of the Company’s products are driven by consumer and industrial demand for interior construction solutions. The timing of customers’ construction projects can be influenced by a number of factors including the prevailing economic climate and weather.

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ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

3 Months Ended

Mar. 31, 2026

Accounting Standards Update and Change in Accounting Principle [Abstract]

ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

3. ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

On November 5, 2024, the FASB issued Accounting Standards Update No. 2024-03, “Disaggregation of Income Statement Expenses” (“ASU-2024-03”) which requires further disaggregated information on an entity’s types of expenses presented to better understand the components of an entity’s expense captions. The amendments within ASU-2024-03 are effective for annual reporting periods starting December 15, 2026, and interim periods beginning after December 15, 2027, on a prospective basis with an option of retrospective application. The Company is evaluating the impact of the adoption of this standard and expects this to impact the presentation and disclosures of the Consolidated Statement of Operations and Comprehensive (Loss) Income.

On November 27, 2024, the FASB issued Accounting Standards Update No. 2024-04, “Induced Conversions of Convertible Debt Instruments” (“ASU-2024-04”) which requires discussing an entity’s assessment of induced conversion and debt extinguishment of convertible debt instruments. The amendments in ASU-2024-04 are effective for fiscal years beginning after December 15, 2025, on a prospective basis with an option of retrospective application. The Company has adopted this standard and expects minimal impact, as the Company has no existing convertible debt instruments to which this update applies.

On July 30, 2025, the FASB issued Accounting Standards Update No. 2025-05, “Financial Instruments - Credit Losses” (“ASU-2025-05”) which requires additional consideration when estimating the expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The amendments in ASU-2025-05 are effective for fiscal years beginning after December 15, 2025. The Company has adopted this standard and expects minimal impact to the financial statements and disclosures.

On September 18, 2025, the FASB issued Accounting Standards Update No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software” (“ASU-2025-06”) which targets improvements to the accounting for internal-use software. The amendments in ASU-2025-06 are effective for fiscal years beginning after December 15, 2027, on a prospective basis with an option of retrospective application. The Company is evaluating the impact of the adoption of this standard.

On December 8, 2025, the FASB issued Accounting Standards Update No. 2025-11, “Narrow-Scope Improvements to Interim Reporting” (the “ASU-2025-11”) which clarifies the guidance on interim reporting disclosures. The amendments in ASU-2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is evaluating the impact of the adoption of this standard.

Although there are several other new accounting standards issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its Financial Statements.

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REORGANIZATION

3 Months Ended

Mar. 31, 2026

Restructuring and Related Activities [Abstract]

REORGANIZATION

4. REORGANIZATION

Transformation Office

In early 2025, a transformation office was set up, to accelerate the strategic transformation of our business by streamlining the Company’s processes and procedures, supporting the Construction Services channel, and improving productivity across the Company (the “Transformation Office”). We are incurring one-time consultant costs to assist in, advise, and implement our transformation actions, as well as one-time termination benefits as a result of elimination of positions. The program is planned to be completed in 2026.

For the three months ended March 31, 2026 and 2025, the following reorganization costs incurred relate to the above mentioned initiatives:

	For the Three Months Ended March 31,
	2026		2025
Termination benefits		1,404		-
Transformation Office costs		949		-
Rock Hill Facility closure of operations		-		210
Other costs		14		-
Total reorganization costs		2,367		210

Reorganization costs in accounts payable and accrued liabilities at January 1, 2026	2,088
Reorganization expense	2,367
Reorganization costs paid	(1,840	)
Reorganization costs in accounts payable and accrued liabilities at March 31, 2026	2,615

Of the $2.6 million of reorganization costs in accounts payable and accrued liabilities as at March 31, 2026 (December 31, 2025 – $2.1 million), $2.2 million relates to termination benefits (December 31, 2025 – $1.8 million) and $0.4 million relates to other reorganization costs (December 31, 2025 – $0.3 million).

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TRADE AND ACCRUED RECEIVABLES

3 Months Ended

Mar. 31, 2026

Receivables [Abstract]

TRADE AND ACCRUED RECEIVABLES

5. TRADE AND ACCRUED RECEIVABLES

Accounts receivable are recorded at the invoiced amount, do not require collateral and typically do not bear interest. The Company estimates an allowance for credit losses using the lifetime expected credit loss at each measurement date, taking into account historical credit loss experience as well as forward-looking information, in order to establish rates for each class of financial receivable with similar risk characteristics. Adjustments to this estimate are recognized in the consolidated statement of operations.

In order to manage and assess our risk, management maintains credit policies that include regular review of credit limits of individual receivables and systematic monitoring of aging of trade receivables and the financial well-being of our customers. At March 31, 2026, approximately 66% of our trade accounts receivable are trade credit insured, relating to accounts receivable from counterparties deemed creditworthy by the insurer and excluding accounts receivable from government entities. In addition, where possible, we collect a 50% deposit on sales, excluding government and certain other clients.

Our trade balances are spread over a broad Construction Partner base, which is geographically dispersed. For the three months ended March 31, 2026, two Construction Partners accounted for greater than 9% of revenue (one Construction Partner accounted for 9% of revenue for the three months ended March 31, 2025).

The Company’s aged receivables were as follows:

	As at
	March 31, 2026			December 31, 2025
Current		21,389			19,894
Overdue		2,501			2,552
		23,890			22,446
Less: expected credit losses		(77	)		(77	)
Trade and accrued receivables, net of expected credit losses		23,813			22,369

No adjustment to our expected credit losses of $0.1 million was required for the three months ended March 31, 2026 for our trade receivables. Receivables are generally considered to be past due when over 60 days old, unless there is a separate payment arrangement in place for the collection of the receivable.

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OTHER LIABILITIES

3 Months Ended

Mar. 31, 2026

Other Liabilities Disclosure [Abstract]

OTHER LIABILITIES

6. OTHER LIABILITIES

	As at
	March 31, 2026		December 31, 2025
Warranty provisions (1)		858		863
DSU liability		2,254		1,954
Income taxes payable		253		247
Sublease deposits		112		206
Other provisions and other liabilities		2,162		2,166
Other liabilities		5,639		5,436

(1)The following table presents a reconciliation of the warranty provision balance:

	As at
	March 31, 2026			December 31, 2025
As at January 1,		863			849
Additions to warranty provision		113			619
Payments related to warranties		(118	)		(605	)
		858			863

As previously disclosed, DIRTT Environmental Solutions Inc. received a subpoena for records in relation to an ongoing inquiry by the U.S. Department of Justice into certain projects and services provided by a third party and DIRTT dating back to 2014. The Company is complying with the subpoena and cooperating with the U.S. Department of Justice. There have been ongoing discussions regarding the possible resolution of these matters with the U.S. Department of Justice without admitting or denying liability. Based on the discussions to date, the Company provided $2.0 million as at December 31, 2025 for the cost of a potential settlement of these matters with the U.S. Department of Justice.

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LONG-TERM DEBT

3 Months Ended

Mar. 31, 2026

Debt Disclosure [Abstract]

LONG-TERM DEBT

7. LONG-TERM DEBT

	Leasing Facilities			Convertible Debentures			BDC Loan			Total Debt
Balance at January 1, 2025		373			21,979			-			22,352
Accretion of issue costs		-			338			-			338
Accrued interest		28			1,384			-			1,412
Interest payments		(28	)		(1,394	)		-			(1,422	)
Principal repayments		(81	)		(314	)		-			(395	)
Gain on extinguishment		-			(24	)		-			(24	)
Exchange differences		17			1,101			-			1,118
Balance at December 31, 2025		309			23,070			-			23,379
Current portion of long-term debt and accrued interest		89			23,070			-			23,159
Long-term debt		220			-			-			220
Balance at January 1, 2026		309			23,070			-			23,379
Issuances		-			-			6,908			6,908
Accretion of issue costs		-			52			9			61
Accrued interest		6			227			30			263
Interest payments		(6	)		(361	)		(30	)		(397	)
Principal repayments		(22	)		(12,043	)		-			(12,065	)
Exchange differences		(4	)		(247	)		(7	)		(258	)
Balance at March 31, 2026		283			10,698			6,910			17,891
Current portion of long-term debt and accrued interest		90			10,698			1,644			12,432
Long-term debt		193			-			5,266			5,459

Revolving Credit Facility

On February 12, 2021, the Company entered into a loan agreement governing a C$25.0 million senior secured revolving credit facility with the Royal Bank of Canada (“RBC”), as lender (the “RBC Facility”), as disclosed in our Annual Report on Form 10-K. The Company has extended the RBC Facility a number of times since 2023, including on November 4, 2025 (the “Fifth Extended RBC Facility”). The Fifth Extended RBC Facility matures on November 30, 2026 and is subject to the same borrowing base terms as the previous facility with the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points. The Company would have been in default under the Fifth Extended RBC Facility if the January Debentures were not paid in full or refinanced on terms and conditions satisfactory to RBC by January 31, 2026. The January Debentures were paid in full on January 31, 2026.

On February 11, 2026 and in connection with the Loan (as defined herein), the Company amended the Fifth Extended RBC Facility (the “Seventh Amended RBC Facility”) and, together with its subsidiary, entered into priority agreements with RBC and BDC (collectively, the “Priority Agreement”). The Seventh Amended RBC Facility matures on November 30, 2026 and is subject to the same borrowing base terms as the previous facility. The Seventh Amended RBC Facility allows the Company to incur indebtedness to BDC of C$15 million under the Loan and incorporates permitting specific encumbrances to BDC and the Priority Agreement. The Seventh Amended RBC Facility also releases certain mortgage collateral held by RBC.

On March 11, 2026, the Company entered into the Waiver and Eighth Amendment to Loan Agreement (the “Eighth Amended RBC Facility”), which matures on November 30, 2026. The Eighth Amended RBC Facility is subject to the same borrowing base terms stated in the Seventh Amended RBC Facility. The Eighth Amended RBC Facility includes a customary “Restricted Payments” covenant that prohibits us from, among other things, repurchasing our common shares and paying dividends, unless we have satisfied certain conditions (the “Payment Conditions”). The Payment Conditions include conditions that, after giving effect to the relevant Restricted Payment, the Company has a net borrowing availability of C$5.0 million over the preceding 30-day period, and our fixed charge coverage ratio (“FCCR”) be at least 1.10 to 1.00 on a trailing 12-month basis. In February 2026, we and RBC determined that our purchases of our common shares under our NCIB in December 2025 did not comply with the Restricted Payments covenant because our FCCR was below 1.10 to 1.00. The Eighth Amended RBC Facility provided a waiver in connection with the foregoing.

At March 31, 2026, available borrowings under the Eighth Amended RBC Facility are C$14.0 million ($10.1 million) (December 31, 2025 – C$16.3 million ($11.8 million) of available borrowings), calculated in the same manner as the RBC Facility described above, of which no amounts have been drawn. Under the RBC Facility, if the “Net Borrowing Availability” (defined as the borrowing base less any loan advances and letters of credit or guarantee and if undrawn including unrestricted cash), was less than C$3.0 million for at least thirty consecutive calendar days, the Company is subject to a FCCR covenant of 1.10:1 on a trailing twelve-month basis. As at March 31, 2026, the Company is in compliance with its financial covenants.

Leasing Facilities

The Company has a C$5.0 million equipment leasing facility in Canada (the “Canada Leasing Facility”) of which C$4.4 million ($3.2 million) has been drawn and C$4.0 million ($3.0 million) has been repaid. The Canada Leasing Facility has a seven-year term and bears interest at 4.25%.

The Company did not make any draws on the Canada Leasing Facility during the three months ended March 31, 2026 (2025 – $nil). The associated financial liabilities are shown on the consolidated balance sheet in the current portion of long-term debt and accrued interest and long-term debt.

Convertible Debentures

On January 25, 2021, the Company completed a C$35.0 million ($27.5 million) bought-deal financing of convertible unsecured subordinated debentures (the “January Debentures”) with a syndicate of underwriters. On January 29, 2021, the Company issued a further C$5.25 million ($4.1 million) of the January Debentures under the terms of an overallotment option granted to the underwriters. The January Debentures matured and became repayable

on January 31, 2026 (the “January Debentures Maturity Date”) and accrued interest at the rate of 6.00% per annum payable semi-annually in arrears on the last day of January and July of each year commencing on July 31, 2021 until the January Debentures Maturity Date. Interest and principal were payable in cash or shares at the option of the Company. The January Debentures were convertible into common shares of DIRTT, at the option of the holder, at any time prior to the close of business on the business day prior to the earlier of the January Debentures Maturity Date and the date specified by the Company for redemption of the January Debentures. Costs of the transaction were approximately C$2.7 million, including the underwriters’ commission. On November 21, 2023, the Company announced that the Board of Directors had approved a rights offering (the “Rights Offering”) to its common shareholders for aggregate gross proceeds of C$30.0 million ($22.4 million). As a result of the Rights Offering, the conversion price of the January Debentures was adjusted to C$4.03 per common share representing a conversion rate of 248.1390 common shares per C$1,000 principal amount. On March 22, 2024, the Company completed the issuer bid in which the Company repurchased for cancellation C$4.7 million ($3.5 million) of the principal balance of the January Debentures, and paid C$0.04 million ($0.03 million) of the interest payable on such January Debentures (“Issuer Bid”). On August 2, 2024, the Company purchased C$18,915,000 principal amount of the January Debentures for cancellation through the Debenture Repurchase. On August 28, 2024, the Company commenced the Debentures normal course issuer bid (the “Debentures NCIB”) which expired on August 27, 2025. On August 26, 2025, the Company announced the renewal of the Debentures NCIB which commenced on August 28, 2025 upon expiry of the Debentures NCIB (the “Renewed Debentures NCIB”) and is expected to terminate on August 27, 2026 for the December Debentures. The Renewed Debentures NCIB terminated on January 31, 2026, with respect to the January Debentures, concurrent with the January Debentures Maturity Date and repayment of the January Debentures. During the three months ended March 31, 2026, the Company repurchased for cancellation C$nil ($nil) principal amount of January Debentures (C$0.03 million ($0.02 million) for the three months ended March 31, 2025 as part of the Debentures NCIB). The January Debentures balance of C$16.6 million ($12.1 million) was paid in full on January 31, 2026.

On December 1, 2021, the Company completed a C$35.0 million ($27.4 million) bought-deal financing of convertible unsecured subordinated debentures (the “December Debentures”, and collectively with the January Debentures, the “Debentures” with a syndicate of underwriters. The December Debentures will mature and be repayable on December 31, 2026 (the “December Debentures Maturity Date”) and accrue interest at the rate of 6.25% per annum payable semi-annually in arrears on the last day of June and December of each year commencing on June 30, 2022 until the December Debentures Maturity Date. Interest and principal are payable in cash or shares at the option of the Company. The December Debentures will be convertible into common shares of DIRTT, at the option of the holder, at any time prior to the close of business on the business day prior to the earlier of the December Debentures Maturity Date and the date specified by the Company for redemption of the December Debentures. Costs of the transaction were approximately C$2.3 million, including the underwriters’ commission. As a result of the Rights Offering, the conversion price of the December Debentures was adjusted to C$3.64 per common share representing a conversion rate of 274.7253 common shares per C$1,000 principal amount. On March 22, 2024, the Company completed the Issuer Bid in which the Company repurchased for cancellation C$5.8 million ($4.3 million) of the principal balance of the December Debentures and paid C$0.08 million ($0.06 million) of the interest payable on such December Debentures. On August 2, 2024, the Company repurchased for cancellation C$13.6 million ($10.1 million) principal amount of December Debentures held by 22NW Fund, L.P. (“22NW”). On August 28, 2024, the Company commenced the Debentures NCIB which expired on August 27, 2025. On August 26, 2025, the Company announced the Renewed Debentures NCIB which commenced on August 28, 2025 upon expiry of the Debentures NCIB. The Renewed Debentures NCIB is expected to terminate on August 27, 2026 with respect to the December Debentures. During the three months ended March 31, 2026, the Company repurchased for cancellation C$0.03 million ($0.02 million) principal amount of the December Debentures, as part of the Renewed Debentures NCIB and (C$0.1 million ($0.1 million) for the three months ended March 31, 2025 as part of the Debentures NCIB. As at March 31, 2026, C$14.8 million ($10.6 million) principal amount of the December Debentures was outstanding.

BDC Loan

On December 11, 2025, the Company entered into a letter agreement (the “Letter”) with the Business Development Bank of Canada (“BDC”), pursuant to which BDC committed to lending the Company up to C$15.0 million (the “Loan”) subject to the satisfaction of certain conditions. The Letter was subsequently amended on January 30, 2026, February 9, 2026 and March 9, 2026 (the “Amended Letter”).

Following the satisfaction of the conditions precedent set forth in the Letter, the Company received an initial

disbursement of C$5.5 million on February 13, 2026 and, following satisfaction of certain additional conditions, a second disbursement of C$4.5 million on March 11, 2026. Subject to certain conditions, it is expected that BDC will make a third disbursement of C$5.0 million in the second half of 2026. The Loan accrues interest at a rate equal to BDC’s floating base rate (6.55% per annum) minus 0.75%. Monthly principal repayments of the Loan commence in May 2026 and additional monthly interest payments are due on the last day of each month, beginning on March 31, 2026. The Loan matures on April 30, 2032. Costs of the transaction were approximately C$0.4 million ($0.3 million). As at March 31, 2026, the Company is in compliance with the Loan’s financial covenants.

The obligations of the Company under the Amended Letter are secured by: (a) general security agreements from the Company granting (i) a first-ranking security interest in specific equipment, and (ii) a second priority security interest in all other present and after acquired personal property (excluding consumer goods), subject to certain registered charges; (b) guarantees from DIRTT Environmental Solutions, Inc. for the full amount of the Loan, supported by general security agreements granting (i) a first ranking security interest in specific equipment and (ii) second priority security interest in all other present and after acquired personal property (excluding consumer goods), subject to certain registered charges; (c) various landlord’s waivers of distraint; (d) first mortgage in the principal amount of US$5.0 million on the land and buildings located at 325 North Wells Street, Chicago, IL, USA, and (e) a letter of credit for C$3.5 million for the third disbursement of C$5.0 million.

The proceeds of the Loan, together with cash on hand, were used to refinance the January Debentures.

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

8. STOCK-BASED COMPENSATION

In May 2020, shareholders approved the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan, which was subsequently amended and restated in each of 2023, 2024 and 2025 and is currently called the DIRTT Environmental Solutions Ltd. Third Amended and Restated Long-Term Incentive Plan (as amended and restated, the “LTIP”). Each amendment and restatement was approved by our shareholders. The LTIP replaced the predecessor incentive plans, being the Performance Share Unit Plan (“PSU Plan”) and the Amended and Restated Stock Option Plan (“Stock Option Plan”). No further awards have been or will be granted under either the Stock Option Plan or the PSU Plan following initial approval of the LTIP in May of 2020, but both plans remain in place to govern the terms of any awards that were granted pursuant to such plans.

The LTIP gives the Company the ability to award options, share appreciation rights, restricted share units, deferred share units, restricted shares, dividend equivalent rights, and other share-based awards and cash awards to eligible employees, officers, consultants and directors of the Company and its affiliates. In accordance with the LTIP, the sum of (i) 30,350,000 common shares plus (ii) the number of common shares subject to stock options previously granted under the Stock Option Plan that, following May 22, 2020, expire or are cancelled or terminated without having been exercised in full, have been reserved for issuance under the LTIP. Upon vesting of certain LTIP awards, the Company may withhold shares as a means of meeting DIRTT’s tax withholding requirements in respect of the withholding tax remittances required in respect of award holders. To the extent the fair value of the withheld shares upon vesting exceeds the grant date fair value of the instrument, the excess amount is credited to retained earnings or deficit.

Prior to May of 2023, deferred share units (“DSUs”) were granted to non-employee directors under the Deferred Share Unit Plan for Non-Employee Directors (as amended and restated, the “DSU Plan”) and settleable only in cash.

As of May 30, 2023, the LTIP provides the Company the ability to settle DSUs in either cash or common shares, while consolidating future share-based awards under a single plan. The terms of the DSU Plan are otherwise materially unchanged as incorporated into the LTIP. Effective May 30, 2023, no new awards have been or will be made under the DSU Plan, but awards previously granted under the DSU Plan will continue to be governed by the DSU Plan. DSUs are settled following cessation of services with the Company.

Stock-based compensation expense

	For the Three Months Ended March 31,
	2026			2025
Equity-settled awards		918			739
Cash-settled awards		(43	)		-
		875			739

The following summarizes RSUs, PRSUs, PSUs (each as defined herein) and DSUs activity during the periods:

	RSU Time-			RSU Performance-
	Based			Based			PSU			DSU
	Number of			Number of			Number of			Number of
	units			units			units			units
Outstanding at December 31, 2024		10,260,791			45,177			1,845,608			4,033,894
Granted		-			-			-			247,277
Vested or settled		(343,455	)		-			-			-
Withheld to settle employee tax obligations		(952	)		-			-			-
Forfeited or expired		(73,235	)		(45,177	)		-			-
Outstanding at March 31, 2025		9,843,149			-			1,845,608			4,281,171
Outstanding at December 31, 2025		8,181,585			-			2,597,608			3,464,988
Granted		-			-			-			258,254
Vested or settled		(1,715,613	)		-			-			-
Withheld to settle employee tax obligations		(1,414,970	)		-			-			-
Forfeited or expired		(180,214	)		-			(922,804	)		-
Outstanding at March 31, 2026		4,870,788			-			1,674,804			3,723,242

Restricted share units (time-based vesting)

Except as noted below, outstanding restricted share units (“RSUs”) that vest based on time have an aggregate time-based vesting period of three years and generally one-third of the RSUs vest every year over a three-year period from the date of grant. The RSUs will be settled following vesting by way of the provision of cash or shares to employees (or a combination thereof), at the discretion of the Company. There were no RSUs granted in the three months ended March 31, 2026 and March 31, 2025, respectively.

Restricted share units (performance-based vesting)

During 2022 and 2021, RSUs were granted to executives with service and performance-based conditions for vesting based on the Company’s share price performance (the “PRSUs”). Based on share price performance since the date of grant, 66.7% of the 2021 PRSUs vested on March 1, 2024, but none of the 2022 PRSUs vested upon completion of the three-year service period. All PRSUs were expired as of March 31, 2025.

Performance share units

During the second quarter of 2023, certain executives were issued a strategic equity grant through performance share units (“PSUs”). The performance period of the PSUs is from January 1, 2023, to December 31, 2026, with a cliff vesting term for December 31, 2026. An aggregate of 2,584,161 PSUs were granted and depending on the level of performance, the PSUs will vest 100%, 160% or 190% up to a maximum of 4,909,907 PSUs. Settlement will be made in the form of shares issued from treasury. The performance measures are a combination of Revenue and Earnings Before Interest, Taxes, Depreciation and Amortization and both targets have to be achieved. As of March 31, 2026, the fair value of these PSUs have been deemed to be $nil based on the likelihood of achieving the targets compared to current results. During the third quarter of 2023 and the first quarter of 2026, 738,553 PSUs and

922,804 PSUs, respectively, with a $nil value were forfeited as a result of executive departures and 922,804 PSUs with a $nil value are outstanding at March 31, 2026.

During the fourth quarter of 2025, the Company granted 752,000 PSUs to its chief transformation officer. The performance period is from November 26, 2025 to June 30, 2026 with a cliff vesting date for June 30, 2026. The performance measures relate to success of cost savings targets tied to transformation efforts by the Company. As of March 31, 2026, the PSUs were deemed to have a value of $0.6 million (December 31, 2025 – $0.6 million).

Deferred share units

Granted under the DSU Plan

The fair value of the DSU liability and the corresponding expense is charged to profit or loss at the grant date. Subsequently, at each reporting date between the grant date and settlement date, the fair value of the liability is remeasured with any changes in fair value recognized in profit or loss for the period. DSUs outstanding at March 31, 2026 had a fair value of $0.4 million which is included in other liabilities on the balance sheet (December 31, 2025 – $0.5 million).

Granted under the LTIP

DSUs granted after May 30, 2023 (the “New DSUs”) will be settled by way of the provision of cash or shares (or a combination thereof) to the directors, at the discretion of the Company. The Company intends to settle these DSUs through issuances of common shares. The weighted average fair value of the DSUs granted in the first three months of 2026 and 2025 was C$0.77 ($0.55) and C$1.04 ($0.73), respectively, which was determined using the closing price of the Company’s common shares on the grant date. New DSUs outstanding at March 31, 2026 had a fair value of $1.5 million which is included in other liabilities on the balance sheet (December 31, 2025 – $1.4 million).

Dilutive Instruments

For the three months ended March 31, 2026 and three months ended March 31, 2025, 1.1 million and 6.6 million RSUs, respectively, 2.8 million and 3.0 million New DSUs, respectively, 0.9 million and 1.8 million PSUs, respectively, and 18.1 million and 31.4 million common shares, respectively, which would have been issued if the principal amounts of the December Debentures and the January Debentures were settled in common shares at the quarter-end price were excluded from the diluted weighted average number of common shares, as their effect would have been anti-dilutive to the net loss per share.

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SHARE REPURCHASES

3 Months Ended

Mar. 31, 2026

Share Repurchase Program [Abstract]

SHARE REPURCHASES

9. SHARE REPURCHASES

On December 18, 2024, the Company announced a normal course issuer bid for common shares (the “Shares NCIB”), which commenced on December 20, 2024 and terminated on December 19, 2025, and permitted DIRTT to acquire up to 7,515,233 common shares. All repurchases under the Shares NCIB were made on the open market through the facilities of the Toronto Stock Exchange (the “TSX”) at the market price of common shares at the time of acquisition. Any common shares acquired through the Shares NCIB were immediately cancelled.

On December 18, 2025, the Company announced the renewal of the Shares NCIB which commenced on December 22, 2025 and will terminate on December 21, 2026 (the “Renewed Shares NCIB”). The Renewed Shares NCIB permits DIRTT to acquire up to 9,593,878 of its common shares. All purchases will be made on the open market through the facilities of the TSX at the market price of common shares at the time of the acquisition. Any common shares acquired through the Renewed Shares NCIB will be immediately cancelled.

On February 13, 2025, the Company entered into a share repurchase agreement (the “NGEN Repurchase Agreement”) with NGEN III, LP (“NGEN”), pursuant to which the Company purchased for cancellation 3,920,844 common shares held by NGEN at a purchase price of $0.80 per common share (the “Share Repurchase”). Pursuant to the terms of the NGEN Repurchase Agreement, the purchase price of $0.80 per common share was a 1% discount to the closing price of the common shares on the TSX on January 27, 2025 (converted into U.S. Dollars using the February 13, 2025 closing exchange rate published by the Bank of Canada). Upon completion of the Share Repurchase on February 14, 2025, there were 189,643,903 common shares outstanding. The common shares repurchased under

the Share Repurchase count against the maximum number of shares that could be repurchased pursuant to the Shares NCIB, being 7,515,233 shares.

Under the Renewed Shares NCIB, DIRTT acquired and cancelled 208,006 common shares during the three months ended March 31, 2026, under the Shares NCIB (1,860,152 common shares for the year ended December 31, 2025).

The following table summarizes the common shares repurchased and cancelled during the period:

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced programs		Maximum number of shares that may yet be purchased under the program
January 1, 2026 - January 31, 2026		116,253	$	0.64		116,253		9,477,625
February 1, 2026 - February 28, 2026		53,085	$	0.65		53,085		9,424,540
March 1, 2026 - March 31, 2026		38,668	$	0.69		38,668		9,385,872
Total		208,006				208,006		9,385,872

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REVENUE

3 Months Ended

Mar. 31, 2026

Revenue from Contract with Customer [Abstract]

REVENUE

10. REVENUE

In the following table, revenue is disaggregated by performance obligation and timing of revenue recognition. All revenue comes from contracts with customers. See Note 11 for the disaggregation of revenue by geographic region.

	For the Three Months Ended March 31,
	2026		2025
Product		36,306		36,224
Transportation		4,292		3,938
License fees from Construction Partners		218		184
Total product revenue		40,816		40,346
Installation and other services		1,616		949
		42,432		41,295

DIRTT sells its products and services pursuant to fixed-price contracts which generally have a term of one year or less. The transaction price used in determining the amount of revenue to recognize from fixed-price contracts is based upon agreed contractual terms with each customer and is not subject to variability.

	For the Three Months Ended March 31,
	2026		2025
At a point in time		40,598		40,162
Over time		1,834		1,133
		42,432		41,295

Revenue recognized at a point in time represents the majority of the Company’s sales. Revenue is recognized when a customer obtains legal title to the product, which is when ownership of the product is transferred to, or services are delivered to, the customer. Revenue recognized over time includes pre-construction services, license fees, installation and ongoing maintenance contracts with customers and is recorded as performance obligations which are satisfied over the term of the contract.

Contract Liabilities

	As at
	March 31, 2026		December 31, 2025		December 31, 2024
Customer deposits		4,559		3,474		4,028
Deferred revenue		660		33		-
Contract liabilities		5,219		3,507		4,028

Contract liabilities primarily relate to deposits received from customers and maintenance revenue from license subscriptions. The balance of contract liabilities was higher as at March 31, 2026 compared to December 31, 2025 mainly due to the timing of orders and payments. Contract liabilities as at December 31, 2025 and 2024 totaling $3.5 million and $4.0 million, respectively, were recognized as revenue in the three months ended March 31, 2026 and 2025, respectively.

Sales by Industry

The Company periodically reviews the growth of product and transportation revenue by vertical market to evaluate the success of industry-specific sales initiatives. The nature of products sold to the various industries is consistent and therefore review is focused on sales performance.

	For the Three Months Ended March 31,
	2026		2025
Commercial		24,635		28,098
Healthcare		12,001		7,204
Government		2,624		2,649
Education		1,338		2,211
License fees from Construction Partners		218		184
Total product and transportation revenue		40,816		40,346
Installation and other services		1,616		949
		42,432		41,295

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2026

Segment Reporting [Abstract]

SEGMENT REPORTING

11. SEGMENT REPORTING

The Company has one reportable and operating segment and operates in two principal geographic locations – Canada and the United States. Revenue continues to be derived almost exclusively from projects in North America and predominantly from the United States. The Company’s revenue from operations from external customers, based on location of operations, and information about its non-current assets, is detailed below.

Revenue from external customers

	For the Three Months Ended March 31,
	2026		2025
Canada		5,808		6,878
U.S.		36,624		34,417
		42,432		41,295

Non-current assets

	As at March 31,		As at December 31,
	2026		2025
Canada		24,760		26,013
U.S.		13,272		14,104
		38,032		40,117

DIRTT has one reportable segment: solutions. The DIRTT solutions segment derives revenues from customers by providing physical products and digital tools through our ICE software to create interior spaces for our customers across the commercial, healthcare, education and government industries. The solutions segment provides digital tools (access to ICE software) and physical products to create modular interior construction spaces for our customers.

DIRTT’s chief operating decision makers are its chief financial officer and chief executive officer. The chief operating decision makers assess performance for the solutions segment and decide how to allocate resources based on gross profit and net income (loss) that also is reported on the Consolidated Statement of Operations and Comprehensive Income (Loss) as consolidated gross profit and net income (loss). The measure of segment assets is reported on the balance sheet as total consolidated assets. The chief operating decision makers use net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the solutions segment or into other parts of the entity, such as to repay long-term debt.

Net income (loss) are used to monitor budget versus actual results. The chief operating decision makers also use net income (loss) in competitive analysis by benchmarking to DIRTT’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.

DIRTT derives revenue primarily in North America and manages the business activities on a consolidated basis. The technology used in the customer arrangements is based on a single software platform that is deployed to, and implemented by, customers in a similar manner.

Segment profit and loss reconciliation to Net loss after tax

	For the Three Months Ended March 31,
	2026			2025
	($ in thousands)
Revenue		42,432			41,295
Operating expenses (1)		16,265			14,864
Operating loss		(3,264	)		(322	)
Other (expenses)/income and (losses)/gains (2)		(9	)		(339	)
Net loss after tax		(3,273	)		(661	)
Reconciliation of profit or loss
Adjustments and reconciling items		-			-
Net loss after tax		(3,273	)		(661	)

(1) Includes Sales and marketing, General and administrative, Operations support, Technology and development, Stock-based compensation, and Reorganization costs.

(2) Includes Tax expenses, non-recurring gains and losses, foreign exchange gains (losses), interest income and interest expenses.

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INCOME TAXES

3 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

12. INCOME TAXES

As at March 31, 2026, the Company had a valuation allowance of $31.2 million against deferred tax assets as the Company has experienced cumulative losses in recent years (December 31, 2025 – $30.9 million).

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2026

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

As at March 31, 2026, the Company had outstanding purchase obligations of approximately $6.8 million related to service commitments, inventory, and property, plant and equipment purchases (December 31, 2025 – $4.0 million). As at March 31, 2026, the Company had undiscounted operating lease liabilities of $26.2 million (December 31, 2025 – $27.8 million).

As previously disclosed, DIRTT Environmental Solutions Inc. received a subpoena for records in relation to an ongoing inquiry by the U.S. Department of Justice into certain projects and services provided by a third party and DIRTT dating back to 2014. The Company is complying with the subpoena and cooperating with the Department of Justice. There have been ongoing discussions regarding the possible resolution of these matters with the Department of Justice without admitting or denying liability. Based on the discussions to date, the Company provided $2.0 million as at December 31, 2025 for the cost of a potential settlement of these matters with the Department of Justice.

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BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of consolidation

Principles of consolidation

The Financial Statements include the accounts of DIRTT Environmental Solutions Ltd. and its subsidiary. All intercompany balances, income and expenses, unrealized gains and losses, and dividends resulting from intercompany transactions have been eliminated on consolidation.

Basis of measurement

Basis of measurement

These Financial Statements have been prepared on the historical cost convention except for certain financial instruments, assets held for sale and certain components of stock-based compensation that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The Company’s quarterly tax provision is based upon an estimated annual effective tax rate.

Seasonality

Seasonality

Sales of the Company’s products are driven by consumer and industrial demand for interior construction solutions. The timing of customers’ construction projects can be influenced by a number of factors including the prevailing economic climate and weather.

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REORGANIZATION (Tables)

3 Months Ended

Mar. 31, 2026

Restructuring and Related Activities [Abstract]

Schedule of Restructuring costs

For the three months ended March 31, 2026 and 2025, the following reorganization costs incurred relate to the above mentioned initiatives:

	For the Three Months Ended March 31,
	2026		2025
Termination benefits		1,404		-
Transformation Office costs		949		-
Rock Hill Facility closure of operations		-		210
Other costs		14		-
Total reorganization costs		2,367		210

Reorganization costs in accounts payable and accrued liabilities at January 1, 2026	2,088
Reorganization expense	2,367
Reorganization costs paid	(1,840	)
Reorganization costs in accounts payable and accrued liabilities at March 31, 2026	2,615

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TRADE AND ACCRUED RECEIVABLES (Tables)

3 Months Ended

Mar. 31, 2026

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

The Company’s aged receivables were as follows:

	As at
	March 31, 2026			December 31, 2025
Current		21,389			19,894
Overdue		2,501			2,552
		23,890			22,446
Less: expected credit losses		(77	)		(77	)
Trade and accrued receivables, net of expected credit losses		23,813			22,369

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OTHER LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2026

Other Liabilities Disclosure [Abstract]

Summary of Other Liabilities

	As at
	March 31, 2026		December 31, 2025
Warranty provisions (1)		858		863
DSU liability		2,254		1,954
Income taxes payable		253		247
Sublease deposits		112		206
Other provisions and other liabilities		2,162		2,166
Other liabilities		5,639		5,436

(1)The following table presents a reconciliation of the warranty provision balance:

	As at
	March 31, 2026			December 31, 2025
As at January 1,		863			849
Additions to warranty provision		113			619
Payments related to warranties		(118	)		(605	)
		858			863

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LONG-TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2026

Debt Disclosure [Abstract]

Summary of Long Term Debt Reconciliation

	Leasing Facilities		Convertible Debentures		BDC Loan		Total Debt
Balance at January 1, 2025		373		21,979		-		22,352
Accretion of issue costs		-		338		-		338
Accrued interest		28		1,384		-		1,412
Interest payments